📈 Sarvodaya Development Finance Rating Upgraded to BBB- (Stable)

• Lanka Rating Agency (LRA) has upgraded Sarvodaya Development Finance (SDF) to BBB- (Stable Outlook) from BB+, reflecting notable improvements in financial performance and capital strength. • Portfolio Growth: The loan portfolio expanded significantly by +25.4% to Rs. 24 Billion in the first six months of FY26 (6M FY26). • Key Segments: Growth was driven by Micro, Small and Medium Enterprise (MSME), leasing, and gold loan segments. • Asset Quality & Capital: • Gross Non-Performing Loans (NPLs) improved to 6.0% (down from 7.9% in FY25), placing it below the industry average. • Capital Adequacy Ratio (CAR) is robust at 25.9%, well above regulatory requirements, following a Rs. 2 Billion Tier II debenture issue. • Financials: Profitability for 6M FY26 improved to approx. Rs. 340.5 Million, supported by stable spreads and lower funding costs. • Constraint: The rating remains constrained by the company’s modest market position, holding approximately 1.13% of total industry assets. Sustaining asset quality and enhancing relative market share are critical to maintaining the new rating.