Friday Jan 30, 2026
Friday Jan 30, 2026
Friday, 30 January 2026 00:06 - - {{hitsCtrl.values.hits}}
Lanka Rating Agency has assigned an initial entity rating of A+ with a Stable Outlook to LB Finance PLC, citing its strong market position, consistent performance and superior asset quality.
“The rating of LB Finance PLC reflects its position as one of the leading players in the leasing and finance companies industry in Sri Lanka, supplemented by consistent performance and very strong asset quality,” Lanka Rating said in a press release.
As at September 2025, LB Finance accounted for around 12.3% of the sector’s total asset base and approximately 12.4% of sector deposits, positioning it among the largest licensed leasing and finance companies in the country. The company is a subsidiary of Vallibel One Group, which holds a majority stake of about 51.75%.
Lanka Rating noted that the company’s “well-established market outreach is augmented by its extensive nationwide footprint of around 221 branches, coupled with technological advancements and robust controls.”
The rating agency highlighted that LB Finance has progressively diversified its lending portfolio while maintaining asset quality. As at September 2025, gold loans accounted for around 38% of the loan book, followed by leasing and vehicle loans at about 42%, with the remainder comprising power drafts, term loans and mortgage lending.
“While the relatively high exposure to gold loans exposes the company to gold price volatility, the risk is partially mitigated through strong controls, including daily price monitoring, conservative margin requirements and periodic portfolio reviews,” the agency said.
On earnings, Lanka Rating said LB Finance’s performance “remains resilient,” with net interest income increasing by about 3.2% year-on-year to Rs. 25.1 billion in FY2025 and improving further to Rs. 14.2 billion in the first half of FY2026. The company reported profits of Rs. 10.8 billion in FY2025 and Rs. 5.8 billion in the first half of FY2026, reflecting a year-on-year increase of around 23.7% for the period.
Asset quality indicators remain well below industry averages, with gross and net non-performing loan ratios at approximately 1.55% and -1.36%, respectively, as at September 2025. Capital adequacy also remains strong, with a capital adequacy ratio of around 23.66%, comfortably above the Central Bank’s minimum requirement of 14% for large licensed finance companies.
The Stable Outlook reflects expectations that LB Finance will sustain its market position, credit quality and performance metrics, while continuing to diversify its loan portfolio and manage funding sources prudently.
