Sarvodaya Development Finance records strong FY2025/26 performance

Channa de Silva – Chairman

Nilantha Jayanetti - CEO

Sarvodaya Development Finance PLC (SDF) has delivered a strong financial performance for the year ended 31 March 2026, recording significant growth in income, profitability, portfolio expansion, and asset quality while continuing its commitment to responsible and inclusive finance. 

For the financial year under review, SDF reported total income of Rs. 6.42 billion, a year-on year increase of 46.8 percent. Interest income rose by 43.8 percent to Rs. 5.85 billion, driven by business expansion and growth in earning assets. 

Net Interest Income increased by 35.4 percent to Rs. 3.58  billion, while Total Operating Income grew by 40.8 percent to Rs. 4.15 billion, reflecting the  Company’s ability to generate strong and sustainable earnings. 

Profitability improved substantially during the year. Operating Profit before Tax on Financial  Services increased by 59.9 percent to Rs. 1.82 billion, while Profit Before Tax rose by 63.8 percent to Rs.1.36 billion. 

Profit for the Year increased by 73.1 percent to Rs. 820.1 million compared with Rs. 473.8 million in the previous year. Earnings per share improved to Rs. 5.48, demonstrating enhanced value creation for shareholders. 

The Company’s balance sheet expanded significantly, with total assets increasing by 65.8 percent to Rs. 37.37 billion as at 31 March 2026. Financial assets at amortized cost, including loans and receivables, grew by 67.2 percent to Rs. 20.60 billion, while lease rental receivables increased by 34.0 percent to Rs. 9.19 billion. SDF also strengthened its funding profile through debt securities, including Sustainable Bonds, amounting to Rs. 2.09 billion. 

Commenting on the performance, Chief Executive Officer, Nilantha Jayanetti stated, “The results achieved during FY2025/26 reflect the strength of our business model, disciplined growth strategy, and commitment to delivering responsible financial solutions. We remain focused on  creating sustainable value while supporting communities and enterprises across Sri Lanka.” 

SDF maintained a strong capital position, with a Tier 1 Capital Adequacy Ratio of 15.48 percent and a Total Capital Adequacy Ratio of 22.13 percent, both comfortably above regulatory requirements. Asset quality also improved, with the Gross Stage 3 Loans Ratio declining to 4.93 percent from 7.88 percent and the  Net Stage 3 Loans Ratio improving to 2.94 percent from 5.70 percent. The Stage 3 Impairment Coverage Ratio strengthened to 42.60 percent. 

Operational efficiency improved as the Cost-to-Income Ratio reduced to 42.99 percent, while Return on  Equity increased to 19.60 percent. Reflecting its stronger financial position, SDF’s external credit rating was upgraded to Lanka Ratings (SL) BBB- Stable.