Upgrade reflects superior asset quality, improved profitability and ambitious expansion plans across Sri Lanka’s finance sector.
Vallibel Finance PLC (VFIN), a licensed finance company in Sri Lanka, has been upgraded by Lanka Rating Agency from BBB- to A-, underscoring its robust market outreach, superior asset quality, and improving profitability.
A Mid-Sized Player with National Reach
Crossing a historic milestone of Rs. 100 billion in assets in FY24/25, Vallibel Finance has cemented its place as one of Sri Lanka’s most trusted and high-performing financial services brands. This achievement reflects the Company’s strength as a financial partner built on integrity, innovation, and long-term impact.
VFIN accounts for around 5.3 percent of total Licensed Finance Company (LFC) sector assets. Its core operations are focused on vehicle loans, auto drafts, gold loans, and leases, which together represent over 94 percent of its lending portfolio. Despite rapid growth, the Company has maintained its non-performing loan (NPL) ratio at industry benchmarks while sustaining strong coverage for impaired loans.
Stronger Financial Performance
Financial results highlight the Company’s solid momentum:
- Net interest income rose by 15.9% to LKR 8,118 million in FY25 (3MFY26: LKR 2,308 million).
- Net income grew by 22.8% to LKR 2,629 million (3MFY26: LKR 785 million), fuelled mainly by higher lease income.
- Core spreads improved to 7.8%, up from 6.0% in FY24, supported by falling interest rates and liability repricing.
Revenue composition shows resilience, with 78% derived from core operations and the remainder from fair value gains, provision write-backs, and early-termination income. The loan and lease portfolio expanded from LKR 92.1 billion in FY25 to LKR 104.3 billion in 3MFY26.
Capital Strength and Risk Management
- Gearing: 6.0x in FY25 (6.9x in 3MFY26).
- Capital Adequacy Ratios: Tier I CAR at 16.54% and Total CAR at 21.51% in FY25 — comfortably above regulatory thresholds, though slightly below industry averages.
- Liquidity: Short-term asset-liability gaps have narrowed, though a wider gap remains in the 1–3-year tenor due to debenture maturities.
Expansion and Future Growth
VFIN is pursuing an aggressive expansion strategy, with plans to open 13 new branches in underserved markets. The Company is also diversifying into margin trading, digital financial services, Islamic banking, and scaling its property loan franchise. By FY26/27, gold loans are expected to comprise one-third of the loan book.
Governance and Leadership
The Company’s Board consists of seven members:
- 4 Independent Non-Executive Directors
- 1 Non-Executive Director (Chairman)
- 2 Executive Directors
Mr. K. D. A. Perera was appointed Chairman in 2023, while Mr. J. Kumarasinghe serves as Senior Independent Director.
Outlook
Lanka Rating Agency has noted that VFIN’s future ratings hinge on its ability to sustain growth, governance, and financial resilience. Any sharp increase in NPLs or weakening of capital adequacy ratios could exert downward pressure on the rating.
About Vallibel Finance PLC
Vallibel Finance PLC is a public limited liability company incorporated in Sri Lanka and listed on the Colombo Stock Exchange. Acquired by Vallibel Investment (Pvt.) Limited in 2005, the Company has grown into a respected brand in the finance sector. Its principal services include finance leases, vehicle loans, auto drafts, gold loans, deposit mobilization, and other credit facilities.
