LOLC Finance credit rating upgraded to A+ (Stable)

• Lanka Rating Agency says commanding share of NBFI sector, accounting for 36.3% of total NBFI sector profits, 30.3% of industry equity, and 20.6% of sector assets

Chairman  Conrad Dias	CEO  Krishan Thilakaratne

Lanka Rating Agency (LRA) has awarded LOLC Finance PLC an A+ rating with a Stable Outlook, a significant step up from its previous A (Positive Outlook) rating. 

As per LRA, this upgrade highlights LOLC Finance’s firm market leadership, robust fundamentals, and its ability to deliver sustainable growth despite a challenging economic environment.

As per LRA, these exceptional performance indicators translated directly into the upgraded rating. LRA cited LOLC Finance’s commanding share of the non-banking financial institution (NBFI) sector, accounting for over 36% of sector profits, 30% of industry equity, and 20% of sector assets, its resilient capital base, and prudent risk management as key factors underpinning the A+ (Stable) assessment.

As at FY24/25, LOLC Finance’s asset base stood at approximately Rs. 430 billion, representing around 20.5% of the industry’s total assets. Net interest income surged to nearly Rs. 42 billion, up 10.8% from FY24, while the core spread improved to 11.6%, driven by declining interest rates and liability re-pricing. Profit After Tax (PAT) rose sharply by 16.4% to Rs. 25.1 billion, with core income making up 84% of total income. 

As per LRA, LOLC Finance continues to maintain high asset quality with gross Non-Performing Loans (NPL) at 7.3% and net NPL at 4.97%, well below industry averages, and a Capital Adequacy Ratio (CAR) of 25.9% in FY24/25, comfortably above the regulatory minimum.

The company consolidated its market presence through a series of strategic mergers in 2022 and 2023, bringing together Commercial Leasing & Finance, LOLC Development Finance, and Sinhaputhra Finance under the LOLC Finance brand. This integration created a unified platform of unmatched scale, expertise, and reach, streamlining operations, unlocking synergies, and enabling the delivery of an expanded portfolio of innovative financial solutions to an ever-growing customer base across Sri Lanka.

LOLC Finance also offers the industry’s most extensive and diversified product portfolio, spanning leasing, loans, gold loans, factoring, credit cards, margin trading, personal finance, operating leases, and alternate financial services (Islamic finance), alongside a comprehensive suite of deposit products including fixed deposits, savings accounts, and the innovative Super Saver range. 

In the digital arena, its flagship fintech solution iPay has emerged as Sri Lanka’s leading digital payment platform, with a commanding 60% share of JustPay and domestic transactions, and handling transactions worth Rs. 19 billion, highlighting LOLC Finance’s commitment to technology-driven financial inclusion.

LOFC Finance PLC Chief Executive Officer Krishan Thilakaratne said: “This reflects not only our performance and current financial strength, but also our vision and future business plans, together with our Environmental, Social and Governance (ESG) focus and the quality of risk management, which have always been key. LOLC Finance continues to be the role model of the industry and strives to further invest in the digital transformation of Sri Lanka’s banking sector, enhance financial inclusion within the Sri Lankan population, uplift the entrepreneurial spirit, and drive product innovation.”

LOFC Finance PLC Chairman Conrad Dias said: “The elevation to an A+ (Stable) rating by LRA is a powerful, independent affirmation of the strategic fortitude and robust financial discipline defining LOLC Finance. This upgrade is not merely a reflection of our industry-leading performance and consolidated market position, but a testament to the disciplined execution of our long-term vision and our unwavering commitment to sustainable, technology-driven financial inclusion across Sri Lanka. It reinforces our resolve to continue setting the benchmark for governance, innovation, and resilience within the financial sector.”

Looking ahead, LOLC Finance said it plans to leverage technology to further strengthen cost efficiency, enhance customer experience, and sustain its leading market position, while maintaining the strong governance and operational standards that underpin its newly upgraded rating.