SBFC Finance Ltd Management Discussions

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We remain confident in our growth journey, as rising investment and resilient demand continue to support expansion, even as geopolitical and trade uncertainties create short-term headwinds.

3.3%

GLOBAL GROWTH FORECAST FOR 2026,

SUPPORTED BY RESILIENT DEMAND AND

INVESTMENT ACROSS MAJOR ECONOMIES.

Overview of the Global Economy:

The global economy demonstrated resilience during 2025 despite a complex mix of geopolitical tensions, evolving trade policies, and shifting financial conditions. According to the International Monetary Fund (IMF), global economic growth is estimated to have remained steady at around 3.3% in 2025. It is projected to remain broadly stable at approximately 3.3% in 2026, reflecting a balance among multiple opposing economic forces.

However, geopolitical conditions

intensified during early 2026, testing the resilience of the global economy. Despite these challenges, the outlook remains

relatively stable, with the Organisation for Economic Co-operation and Development (OECD) maintaining its 2026 growth

projections while marginally revising its 2027 outlook downward by 0.1%, indicating continued but cautious economic stability.

While headline growth has remained stable, the underlying drivers of global expansion continue to diverge across regions. Investment in technology,

particularly in artificial intelligence and digital infrastructure, has emerged as

a major growth catalyst in advanced economies, especially in North America and parts of Asia. At the same time,

fiscal consolidation measures in

several economies and uncertainties around global trade policy have created headwinds that moderate the pace of expansion.

Emerging markets and developing

economies continue to play a pivotal role in sustaining global growth momentum. These economies benefit from favourable

demographic profiles, rising domestic consumption, and ongoing structural reforms aimed at improving productivity and investment flows. However, growth prospects remain uneven across regions due to differences in macroeconomic stability, financial conditions, and

exposure to global trade disruptions. Overall, the global economy in FY2026 can be characterised as stable but uneven, with strong investment activity in certain sectors offset by persistent structural and geopolitical risks.

Global inflation is projected to ease from 4.1% in 2025 to 3.8% in 2026, creating greater room for monetary policy support. However, elevated geopolitical risks and potential energy

supply disruptions remain key factors shaping the global

interest rate outlook.

Inflation Trends and

Monetary Policy

Global inflation continued to moderate during 2025 as the cumulative effects of earlier monetary tightening and easing supply chain pressures helped stabilise price levels across major economies. According to the IMF World Economic Outlook, global headline inflation is projected to decline from an estimated 4.1% in 2025 to 3.8% in 2026 and further to 3.4% in 2027, indicating a gradual return toward central bank targets across most economies.

While inflation has eased across several regions, the pace of moderation varies. Inflation is expected to return to target levels more gradually in the United States than in other major economies due to

relatively strong domestic demand and persistent service inflation.

The inflation outlook, however, remains vulnerable to geopolitical developments. Rising tensions in the Gulf region have increased concerns about potential disruptions to global crude oil and energy supplies. Any sustained increase in energy prices could push inflationary pressures upward, potentially delaying the pace of global monetary easing. Consequently, central banks continue to adopt a

cautious, data-dependent approach as they assess the evolving inflation environment.

Interest rate expectations in major

advanced economies remain cautious as central banks continue to balance inflation control with economic growth

As geopolitical developments continue to evolve, we

recognise that stable energy supplies will remain essential for maintaining growth

momentum, moderating

inflationary risks and

supporting balanced financial conditions across the global economy.

considerations. In the United States, the Federal Reserve has maintained the federal funds rate in the range of 3.5%-3.75%, and current projections suggest that policymakers may keep rates broadly stable through 2026, with any potential easing dependent on sustained moderation in inflation and labour market conditions.

In the United Kingdom, the Bank of Englands policy rate remains the

primary tool for controlling inflation, and monetary authorities have indicated that interest rates will likely remain relatively restrictive until inflation sustainably returns to the 2% target, after which

gradual easing may be considered.

Together, these policy signals suggest that global financial conditions are expected to remain relatively tight in the near term, with any rate reductions likely to occur gradually and data dependent.

Global Gold Market Dynamics Gold emerged as one of the strongest- performing asset classes in 2025,

reflecting heightened geopolitical

uncertainty, currency volatility, and

evolving global financial conditions.

According to the Gold Outlook 2026 report, gold prices rallied in 2025, delivering returns exceeding 60% for the year.

Several factors contributed to this

performance. Persistent geopolitical

tensions and economic uncertainty

increased the appeal of gold as a

safe-haven asset. Central banks across multiple regions continued to increase their gold reserves as part of broader strategies to diversify foreign exchange holdings and reduce exposure to currency volatility.

Investor demand for gold also

strengthened amid expectations of easing monetary policy and potential currency depreciation in certain economies. Lower real interest rates generally enhance the attractiveness of gold, as the opportunity

cost of holding non-yielding assets

declines.

Additionally, continued demand from jewellery markets and retail investors in emerging economies contributed to sustained physical gold demand.

Structural factors, such as financial

inclusion and rising incomes in emerging markets, have further supported long- term trends in gold consumption.

Way Forward

The global economic outlook remains broadly stable, although geopolitical developments continue to pose risks to growth and financial stability. Recent tensions in the Middle East have raised concerns about potential disruptions to global energy markets. However, some analysts suggest that even a wider

regional conflict involving Iran may have a limited direct impact on the global economy, provided that major oil supply routes remain operational and energy production is not severely disrupted. At the same time, the International Monetary Fund has cautioned that the economic consequences of any Middle East conflict would depend largely on its duration, the extent of damage, and the resulting impact on global energy prices, which could influence inflation and financial conditions worldwide.

As stable inflation and prudent monetary management preserve financial stability, India continues to benefit from strong domestic demand and investment activity, supporting sustainable growth and reinforcing its position among the fastest-growing major economies globally.

7.3%

GDP GROWTH PROJECTED BY THE RBI FOR FY26,

SUPPORTED BY RESILIENT CONSUMPTION DEMAND, STRONG SERVICES ACTIVITY AND SUSTAINED PUBLIC INVESTMENT.

Overview of the Indian

Economy:

India continued to demonstrate strong economic resilience, maintaining its position as one of the fastest-growing major economies globally. According to the latest projections of the International Monetary Fund, Indias economy is

expected to expand by around 6.4%

in both 2026 and 2027, supported

by sustained domestic demand,

infrastructure investments, and continued policy support. At the domestic level, the Reserve Bank of India has also expressed confidence in the countrys growth

trajectory, revising its FY26 GDP growth projection upward to approximately 7.3%, reflecting robust consumption demand, resilient services activity, and continued momentum in public capital expenditure. Strong macroeconomic fundamentals, improved financial sector stability, and expanding digital and manufacturing ecosystems have collectively reinforced Indias growth prospects.

Inflation and Monetary Policy Inflation dynamics in India have remained relatively stable compared with several global peers, supported by prudent

monetary management and easing

supply-side pressures in key commodities. During FY2026, Consumer Price Index (CPI) inflation remained broadly within the

central banks medium-term target band of 4% ± 2%, supported by improved food supply conditions and relatively stable core inflation trends. Looking ahead, the RBI projects CPI inflation for FY2027 to rise to 4.6%.

In this backdrop, the Reserve Bank of

India has maintained a cautious monetary policy stance, balancing the objective

of supporting economic growth with the need to ensure that inflation expectations remain anchored. Stable inflation

projections, along with calibrated liquidity management, have helped preserve

financial stability while sustaining the

flow of credit to productive sectors of the economy.

(continued)

External Sector and Trade Prospects

Indias external sector has remained resilient despite persistent global

uncertainties, supported by strong

services exports, steady remittance inflows, and increasing integration of Indian businesses into global value chains. The country has also strengthened its trade relationships with key global partners. The landmark Free Trade

Agreement (FTA) between India and the European Union, often described as the mother of all deals, was signed in January 2026, marking a significant step toward deeper economic integration. The agreement is expected to expand market access, strengthen supply chain linkages, and significantly boost trade and investment flows between the two economies.

At the same time, improving economic engagement with the United States, including tariff reductions in certain sectors, is expected to enhance bilateral trade prospects further and support Indias export growth. India has also continued to strengthen its investment partnerships; in September 2025,

India and Israel signed a new Bilateral Investment Agreement (BIA) to improve investor protection and encourage cross- border investment.

Despite elevated gold prices, domestic demand remained resilient, driving record Gold ETF inflows of Rs.430 billion in 2025 and a 60% increase in investor accounts to 10.2 million, reflecting the enduring appeal of precious metals as savings and investment assets.

Domestic Consumption of Gold and Silver

India remains one of the worlds largest consumers of gold, reflecting its cultural significance and role as a household savings asset. Domestic demand has remained resilient despite elevated

prices, supported by steady wedding- related purchases and strong investment interest. Higher prices have moderated jewellery volumes, prompting consumers to shift toward lightweight designs and lower-purity jewellery, such as 18k and 14k. Jewellery exchange activity has

also increased significantly, with some retailers reporting that over 40% of sales are driven by exchanges of old jewellery, highlighting value-conscious consumer

behaviour. Listed jewellery retailers reported revenue growth of 37%-51% year- on-year during the October-December quarter, largely driven by higher gold prices and festive demand.

Investment demand has also

strengthened through financial

instruments. Gold ETFs recorded net inflows of Rs.430 billion in 2025, the highest on record, while assets under management increased to Rs.1,279 billion and investor accounts rose 60% year- on-year to 10.2 million. Silver demand remains supported by both investment interest and industrial applications, reinforcing the importance of precious metals in Indias financial and

consumption landscape.

Way forward

Looking ahead, Indias economic outlook remains positive, underpinned by strong domestic consumption, expanding infrastructure investment, and continued structural reforms aimed at improving productivity and competitiveness. While geopolitical uncertainties and energy price volatility may introduce short-term risks, the

underlying growth fundamentals of the Indian economy remain robust. With prudent macroeconomic management and a growing role in global trade and supply chains, India is well-positioned to sustain its long-term growth trajectory.

As rising retail credit demand and deeper financial inclusion continue to expand the

addressable market, the NBFC sector is expected to grow

strongly, with overall AUM

projected to increase by around 19% and cross Rs.50 lakh crore in the next fiscal year.

Rs.4 lakh crore GOLD LOAN NBFC AUM

EXPECTED BY FY2027, DRIVEN BY RISING GOLD PRICES

AND STRONG DEMAND FOR SECURED BORROWING.

Industry Overview:

Non-Banking Financial Companies (NBFCs) continued to play a vital role in Indias credit architecture by extending financing to customer segments and geographies that remain relatively underserved by the traditional banking system. As highlighted in NBFCs - Building the Future of India, the sector has emerged as an important channel for financial inclusion, supporting MSMEs, self-employed borrowers, rural and semi-urban customers, and retail borrowers through faster underwriting, more flexible product design, and deeper customer reach.

According to CRISIL Ratings, the NBFC sector is expected to maintain strong growth momentum, with overall AUM projected to grow by around 19% and cross Rs.50 lakh crore in the next fiscal year. This expansion is expected to be driven by sustained demand across retail segments, particularly vehicle finance, MSME loans, and unsecured lending. Asset quality is likely to remain stable, supported by improved underwriting standards and a favourable credit

environment, although some pressure may persist in select segments. Overall, the sector is expected to benefit from strong credit demand, improved access to funding, and continued economic growth.

Emphasising the role of retail credit in overall industry development, a recent FCs) industry report published by ICRA notes that NBFC retail AUM (excluding HFCs) ing continues to grow steadily, expanding s by 17% YoY in H1 FY2026. However, it has the moderated amid asset-quality pressures ted and macroeconomic uncertainties. The , segment is expected to grow at 17-19% in nt FY2026 and 16-18% in FY2027, reflecting ting sustained credit demand. Within this, l gold loans remain the fastest-growing segment, supported by rising gold prices. , In contrast, vehicle finance and personal/ per consumer loans have benefited from improved domestic demand following GST rate cuts. Profitability is expected to remain healthy at 2.3-2.5% in FY2027, although the sector will require an

additional Rs.4.1-4.3 trillion in funding to support growth.

According to a CRISIL Report, the gold etail loan NBFC segment is expected to witness , strong expansion, with assets under

management projected to cross Rs.4 lakh , crore by FY2027. Growth is being driven by rising gold prices, which enhance collateral value, and by sustained demand for short-term, secured credit among ll, retail and small-business borrowers. The segment continues to benefit from its low ss credit risk profile, quick disbursement cycles, and increasing formalisation of gold-backed lending, positioning it as one

of the fastest-growing segments within the NBFC sector.

Sector Outlook

Overall, the Indian NBFC sector entered the second half of FY26 from a position of relative strength, supported by

structural drivers such as rising retail credit penetration, product specialisation, digital adoption, and deeper reach into underbanked segments. However, the operating environment is becoming increasingly complex, with heightened global uncertainties, geopolitical tensions, and the risk of rising inflation, particularly due to elevated energy prices, posing potential challenges. These factors

could influence funding costs, borrower repayment capacity, and overall credit demand.

In this evolving backdrop, the sector is expected to adopt a more cautious and calibrated approach, with greater focus on liquidity management, asset quality, and risk pricing. While tighter regulation and segment-specific stress, particularly in microfinance, continue to remain areas of concern, well-capitalised NBFCs with strong underwriting standards, diversified funding profiles, and disciplined

execution are likely to remain better positioned to navigate potential volatility and sustain growth over the medium term.

Overview of the MSME Sector in India:

The Micro, Small and Medium Enterprises (MSME) sector continues to be a key pillar of Indias socio-economic development, contributing significantly to GDP, exports, and employment generation, while also fostering entrepreneurship across semi- urban and rural regions. As of December 17, 2025, the number of registered

MSMEs stood at 7.3 crore units, reflecting the scale and depth of the sector.

Geographically, the MSME landscape

remains concentrated in a few key states, with Maharashtra, Uttar Pradesh, and Tamil Nadu together accounting for

nearly 32% of total Udyam registrations. Maharashtra leads with over 90 lakh

registrations ( 13%), followed by Uttar Pradesh with 77 lakh ( 11%) and Tamil Nadu with 57 lakh ( 8%), highlighting their strong industrial ecosystems and supportive policy frameworks.

Policy support has remained instrumental in strengthening the MSME ecosystem, particularly through improved access to credit and employment-generation initiatives. Since its inception in 2008- 09, the Prime Ministers Employment Generation Programme (PMEGP)

has supported over 10.71 lakh micro

enterprises, disbursing margin money subsidies of Rs.29,249.43 crore and

generating employment for more than 87 lakh individuals. In 2025 alone, the scheme facilitated the establishment of 84,034 new micro-enterprises, with subsidies amounting to Rs.3,125.35 crore, creating employment for over 6.7 lakh persons and improving accessibility

through multilingual application support. Complementing this, the Credit Guarantee Scheme for Micro and Small Enterprises (CGSME) marked a significant milestone by surpassing one crore guarantees since its inception, with Rs.3.77 lakh crore in

guarantees approved between January and November 2025, thereby reinforcing credit flow and financial inclusion within the sector.

Recent findings by NITI Aayog in its report Enhancing Competitiveness of MSMEs in India highlight a gradual improvement in formal credit access across the sector. Between 2020 and 2024, the share of micro and small enterprises accessing credit through scheduled banks increased from 14% to 20%, while for medium

enterprises, it rose from 4% to 9%,

reflecting the impact of ongoing financial inclusion efforts. Despite this progress,

a significant credit gap of approximately Rs.20-25 lakh crore persists, underscoring structural challenges in the MSME

financing ecosystem.

This gap is largely attributed to factors such as stringent collateral requirements, limited credit histories among small

enterprises, complex documentation processes, and a relatively higher

perceived risk due to market volatility and inadequate financial records. In response, the government has strengthened

support mechanisms such as the Credit Guarantee Fund Trust for Micro and

Small Enterprises (CGTMSE), which

enables collateral-free loans of up to Rs.5 crore, with guaranteed coverage ranging between 50% and 85%, thereby facilitating improved credit flow and addressing financing constraints in the sector.

Policy and budgetary interventions have increasingly focused on addressing

structural bottlenecks in MSME financing, particularly delayed payments and

working capital constraints. An estimated Rs.8.1 lakh crore remains locked in

receivables, impacting liquidity across the sector. To mitigate this, the government has strengthened the Trade Receivables Discounting System (TReDS) by expanding its scope and mandating participation of central public sector enterprises. This is expected to accelerate receivables realisation, improve cash flows, and

reduce financing costs. Since its inception, TReDS has facilitated financing of over Rs.5 lakh crore, with transaction volumes rising 69% year-on-year to Rs.2.33 lakh crore in FY25, alongside improved participation and a high invoice financing success rate of over 95%, indicating growing adoption and efficiency of the platform.

In addition to receivables financing,

broader measures have been introduced to enhance access to growth capital and improve ease of doing business. Initiatives such as enabling invoice discounting

under credit guarantee frameworks,

integrating TReDS with government

procurement systems, and recognising receivables as asset-backed instruments are expected to deepen credit markets for MSMEs. On the equity side, the proposed Rs.10,000 crore SME growth fund and the increased allocation to the Self-Reliant India Fund (Rs.12,000 crore) aim to provide long-term capital to scale enterprises. Complementary reforms, including export facilitation, digital compliance measures, and targeted support for women-led

enterprises, further strengthen the

ecosystem. Collectively, these initiatives reflect a calibrated policy push to improve liquidity, expand financing avenues, and enable sustainable growth for MSMEs. At the same time, effective implementation will remain critical to realising their full impact.

2,00,000+

CUSTOMERS SERVED AS OF

MARCH 2026, UNDERSCORING OUR EXPANDING REACH

AND GROWING MARKET

PRESENCE.

Company Overview

SBFC Finance Limited is a non-deposit- taking Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India, headquartered in Mumbai,

Maharashtra. The Company is classified as part of the Middle Layer under the RBIs Scale-Based Regulation framework. Since its inception in 2008, SBFC has focused on providing secured lending solutions to underserved MSMEs and retail customers, addressing critical credit gaps in Indias financial ecosystem. The Companys core product offerings include Secured MSME Loans and Loans Against Gold, supported by a differentiated PhyGital operating model that combines digital efficiency with personalised, on-ground customer engagement.

By expanding our presence to 251 branches across 199 cities and serving over 2,00,000 customers, we strengthened our reach in underserved markets, supporting disciplined portfolio expansion and driving AUM growth to approximately Rs.11,270 crore as of March 2026.

During FY2026, SBFC continued to

strengthen its franchise by expanding its operational footprint and deepening customer reach. As of March 2026,

the Company serves over 2,00,000

customers through a network of 251

branches across 199 cities, supported by a workforce of 5,000+ employees. Assets Under Management (AUM) stood at approximately Rs.11,270 crore, reflecting sustained growth momentum and

disciplined portfolio expansion. The Companys continued focus on Tier II and Tier III markets has enabled it to build a strong presence in underpenetrated geographies, aligning with its objective of advancing financial inclusion.

SBFC has remained focused on enhancing operational efficiency, strengthening credit underwriting standards, and

improving customer experience through technology-led initiatives. The Company continues to invest in analytics-driven decision-making, streamlined processes, and scalable infrastructure to support long-term growth while maintaining prudent risk management practices. In addition to its lending business, SBFC has also expanded its financial services portfolio through its Corporate Agent (Composite) License from the Insurance Regulatory and Development Authority of India (IRDAI), enabling the distribution

of insurance products and offering more comprehensive financial solutions to its customers.

The Companys shareholding structure reflects strong institutional backing and investor confidence. As of March 31, 2026, the promoter group, Clermont Group, held 52.35% of the shareholding. Among key institutional investors, SBI Mutual Fund held 8.10%, Aditya Birla Sun Life 5.18%, Amansa Capital 4.00%, and Malabar Funds 3.33%. Institutional participation remains significant, with holdings from foreign portfolio investors, mutual funds, and other institutional investors contributing to a diversified ownership base.

Additionally, management and employees held approximately 7.2% of the diluted share capital, reflecting alignment with long-term value creation.

Since its listing on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) in August 2023, SBFC has continued to strengthen its governance framework, enhance transparency, and build a scalable, sustainable business model. With a clear focus on secured lending, disciplined growth, and

customer-centric innovation, the Company remains well-positioned to capitalise on the structural opportunities in Indias MSME and gold lending segments.

(continued)

Our PhyGital operating model enhanced sourcing efficiency,

customer engagement and turnaround times, helping drive 22%

growth in the MSME loan book to Rs.8,873 crore in FY2026 while

preserving strong credit quality and risk discipline.

Business Overview

Our business model is anchored in diversification across geographies, products, and customer segments, which remains central to our risk management and growth strategy. As of FY2026, we operate across 18 states and 2 Union Territories, covering 199 cities

through 251 branches, enabling a wide and balanced distribution footprint. Our branch mix is well spread across regions, with South accounting for 78 branches, North 76, West 58, and East 39, reflecting a diversified physical presence. Similarly, our AUM mix remains geographically balanced, with South contributing 35.6%, North 34.2%, West 16.0%, and East 14.2% of the total AUM of Rs.11,270 crore, reducing concentration risks and enhancing portfolio resilience. This diversification, combined with our focus on secured lending, provides stability across business cycles while enabling consistent growth.

MSME Loans

Our MSME lending business continues to be the core driver of our portfolio, reflecting our strong positioning in

serving underserved small enterprises across India. During FY2026, the segment maintained steady growth momentum, supported by improving economic activity, deeper geographic penetration, and

continued demand for secured credit.

The MSME loan book grew from Rs.7,249 crore in FY2025 to Rs.8,873 crore in FY2026, reflecting a year-on-year growth of 22%, and continues to contribute a significant share of our overall AUM. Growth was driven by our focused expansion strategy, strengthening of branch-led sourcing, and continued traction in Tier II and Tier III markets.

Our portfolio remains well-diversified across states and borrower segments, ensuring low concentration risk. We

continue to target customers with strong credit profiles, typically maintaining a CIBIL score above 700 at origination, while leveraging a combination of data-led

underwriting and on-ground due diligence.

Our PhyGital model remains a key

differentiator, enabling faster turnaround times while maintaining strong customer engagement. This has helped improve sourcing efficiency, customer retention, and cross-sell opportunities.

251 branches ACROSS 18 STATES AND

2 UNION TERRITORIES,

ENABLING BROAD MARKET

COVERAGE AND BALANCED

PORTFOLIO GROWTH.

Asset quality in the MSME segment

remained stable during the year, with GNPA at 3.15% in FY2026 (FY2025: 3.18%) and NNPA at 1.97% (FY2025: 1.81%),

reflecting disciplined underwriting and robust risk monitoring frameworks.

Gold Loans

Our Gold Loan business remains a

high-growth, strategically important segment, benefiting from favourable macroeconomic trends, including

elevated gold prices and rising customer preference for formal, secured lending channels.

During FY2026, the segment recorded strong growth momentum, with AUM increasing from Rs.1,454 crore in FY2025 to Rs.2,374 crore in FY2026, representing a year-on-year growth of 63%. This growth was driven by higher customer acquisition, increased ticket sizes

supported by rising gold prices, and the expansion of our branch-led gold loan operations.

Our Gold Loan product remains

differentiated by its speed, simplicity, and accessibility, enabling customers to avail loans of up to 75% of the gold value with minimal documentation and quick disbursement. The segment continues to serve a wide range of customers,

including small business owners and individuals seeking short-term liquidity.

We have continued to strengthen this segment through process standardisation, technology integration, and operational efficiencies, enabling faster processing and improved customer experience.

Given the products secured nature and conservative LTV approach, the segment continues to exhibit strong asset quality, with GNPA at 0.46% in FY2026 (FY2025: 0.37%) and NNPA at 0.24% (FY2025:

0.29%), thereby maintaining its position as a low-risk portfolio.

The Gold Loan business also provides counter-cyclical stability to our

portfolio, particularly during periods of macroeconomic uncertainty. With strong industry tailwinds and increasing formalisation, this segment is expected to remain a key growth driver while

enhancing overall portfolio diversification.

Higher loan disbursements and continued portfolio expansion strengthened our earnings profile, contributing to a 31% increase in interest income on loans to Rs.15,323 million and a 14% rise in fees and other income to Rs.1,252 million.

Financial Performance

Particulars	FY 2026	FY 2025	Y-o-Y%
Interest Income on Loans	1,532.34	1,167.42	31%
Interest Income other than on Loans	21.92	28.93	-24%
Fee & Other Income	125.16	109.77	14%
Total Income	1,679.42	1,306.12	29%
Finance Cost	537.37	419.23	28%
Operating Expenses	412.94	354.63	16%
Pre-Provisioning Operating Profit	729.10	532.26	37%
Credit Cost	125.49	73.73	70%
Tax Expense	152.77	113.35	35%
Profit after Tax	450.84	345.18	31%
Basic EPS (Rs./ Share)	4.13	3.20	29%
Diluted EPS (Rs./ Share)	4.10	3.15	30%
Particulars	FY 2026	FY 2025	Variance
Return on Average AUM (%)	4.58%	4.53%	+5 bps
Return on Average Tangible Equity (%)	14.18%	12.72%	+146 bps
Net Interest Margin (%)	10.33%	10.20%	+13 bps
Operating Expenses to Average AUM (%)	4.19%	4.65%	-46 bps
Borrowings to Tangible Equity ratio	2.07	1.79	+0.28x
Gross NPA (%)	2.61%	2.74%	-13 bps

Gross NPA (%) 2.61% 2.74% -13 bps .

Analysis of Financial Performance

Interest Income on Loans

on,

Interest income on loans increased from Rs.11,674 million in FY2025 to Rs.15,323 million in FY2026, reflecting a growth of 31% year-on-year. This growth was primarily driven by the expansion of the Companys loan book, with Assets Under Management (AUM) increasing from Rs.87,474 million as of March 31, 2025, to Rs.112,701 million as of March 31, 2026, representing a growth of 29%. The growth in AUM was supported by continued t traction in both the Secured MSME lending segment and the Gold Loan portfolio, as y, well as by the expansion of the branch network and deeper penetration into existing geographies.

as Interest income other than on loans stood at Rs.219 million in FY2026, down from Rs.289 million in FY2025, reflecting a 24% year-on-year change. Movement in this income stream was primarily influenced by changes in treasury deployment, including interest earned on bank deposits and investments in financial instruments.

Fees and Other Income

Fees and other income increased from Rs.1,098 million in FY2025 to Rs.1,252 million in g

FY2026, registering a growth of 14% year-on-year. The growth was supported by higher loan disbursements, increased processing fee income, and continued traction in

ancillary income streams. Additionally, contributions from insurance distribution under on.

the Companys Corporate Agent (Composite) license continued to support non-interest income during the year.

Total Income

Total income increased from Rs.13,061 million in FY2025 to Rs.16,794 million in FY2026, reflecting a growth of 29% year- on-year. The growth in total income was primarily driven by strong expansion in the loan book, stable yields, and

continued fee income streams.

Finance Costs

Finance costs increased from Rs.4,192 million in FY2025 to Rs.5,374 million in FY2026, reflecting a growth of 28%

year-on-year. The increase was primarily attributable to higher borrowings

undertaken to support AUM growth. Total borrowings increased from Rs.52,643 million as of March 31, 2025, to Rs.71,617 million as of March 31, 2026.

The Company maintained a balanced funding profile, comprising bank

borrowings, debt securities, and other funding sources. The borrowings-to- tangible equity ratio stood at 2.07x as of March 31, 2026, compared to 1.79x in FY2025, reflecting calibrated leverage aligned with growth.

Operating Expenses

Operating expenses increased from Rs.3,546 million in FY2025 to Rs.4,129 million in FY2026, reflecting a growth of 16% year- on-year. The increase was primarily driven

Rs.16,794 million TOTAL INCOME ACHIEVED IN FY2026, UNDERPINNED BY

STRONG PORTFOLIO GROWTH AND RECURRING FEE-BASED INCOME.

Our focus on profitable growth and cost discipline translated into a 31% increase in Profit After Tax to Rs.4,508 million, while PAT margin improved from 26.4% to 26.8%, demonstrating

sustained profitability improvement.

by expansion of the branch network, employee costs, and investments in technology and infrastructure to support business growth.

Despite the increase in absolute costs, operating efficiency improved, with the Operating Expense to Average AUM ratio at 4.19% in FY2026, down from 4.65% in FY2025, indicating the benefits of operating leverage and improved cost management.

Credit Cost

Credit costs stood at Rs.1,255 million in FY2026, up from Rs.737 million in FY2025, reflecting a 70% year-on-year increase. Credit cost as a percentage of average AUM stood at 1.27% in FY2026, up

from FY2025 levels, reflecting evolving macroeconomic conditions.

Profit Before Tax (PBT)

Profit Before Tax increased from Rs.4,585 million in FY2025 to Rs.6,036 million in

FY2026, reflecting a growth of 32% year- on-year. The growth in profitability was supported by strong AUM expansion, stable net interest margins, and operating leverage benefits.

The PBT margin (PBT as a percentage of total income) stood at 35.9% in FY2026, up from 35.1% in FY2025, reflecting

improved profitability and efficiency.

Profit After Tax (PAT)

Profit After Tax increased from Rs.3,452 million in FY2025 to Rs.4,508 million in FY2026, reflecting a growth of 31% year- on-year. The growth was driven by strong operating performance and controlled operating costs.

The PAT margin (PAT as a percentage of total income) stood at 26.8% in FY2026, up from 26.4% in FY2025, indicating sustained improvement in profitability.

Risk Management Framework

We have established a robust and dynamic Enterprise Risk Management (ERM)

framework that integrates risk management into our strategic planning, operations, and decision-making processes. This framework enables systematic identification, assessment, monitoring, and mitigation of risks across the organisation, ensuring resilience and stability in a continuously evolving financial environment.

During FY2026, the external risk landscape remained complex, shaped by heightened geopolitical tensions, potential escalation of conflicts in the Middle East, volatility in global energy prices, and evolving inflationary pressures. These developments have the potential to influence borrower cash flows, input costs for MSMEs, credit demand patterns, and funding costs across the financial system. In response, we have further strengthened our risk management practices by incorporating macroeconomic scenario analysis, enhanced portfolio monitoring, and proactive risk mitigation strategies.

Our risk management approach is anchored in regulatory compliance, strong

governance, market intelligence, technological integration, and a well-embedded risk culture. The Board of Directors oversees the risk management framework, with support from the Risk Management Committee, the Audit Committee, and the Asset-Liability Committee (ALCO). These committees play a critical role in defining risk appetite, approving policies, and monitoring the Companys risk profile, while senior management ensures effective implementation across all levels of the organisation.

Credit Risk

Given our core lending focus on MSMEs and Gold Loan customers, credit risk remains a key concern. We follow a disciplined and risk-calibrated underwriting approach, supported by both traditional credit evaluation and data-driven analytics.

Rigorous Underwriting:

Impairment Assessment: We employ advanced credit assessment models, including bureau-based

We follow a three-stage Expected evaluations, cash-flow analysis, and collateral-backed lending structures. Our focus

Credit Loss (ECL) framework-Stage remains on lending to customers with a strong repayment track record, typically

1 (standard), Stage 2 (significant maintaining a CIBIL score above 700 at origination, thereby ensuring high-quality

increase in risk), and Stage 3

portfolio build-up.

(credit impaired)-to enable early identification of stress and timely Portfolio Diversification: provisioning.

Our MSME loan portfolio is well-diversified across geographies, industries, and

borrower profiles, reducing concentration risk and enhancing resilience to sector- Collateral Management:

specific or regional disruptions.

For secured lending, including MSME and Gold Loans, we adhere to strict Impact of Macroeconomic Factors: collateral valuation standards. In the During FY2026, rising input costs-particularly due to energy price volatility Gold Loan portfolio, adherence to and inflationary pressures-posed potential risks to MSME cash flows. We have RBI-prescribed Loan-to-Value (LTV) incorporated these factors into our risk assessment models and strengthened limits, along with periodic revaluation monitoring of vulnerable borrower segments. of gold collateral, provides strong risk protection against price fluctuations.

By combining disciplined underwriting, diversified portfolios and enhanced risk monitoring, we strengthened our ability to manage evolving macroeconomic risks, helping protect asset quality and maintain resilience across our MSME and Gold Loan businesses.

Operational Risk

Operational risk arises from potential failures in internal processes, systems, or human factors, particularly as the Company continues to scale its operations and expand its branch network.

Internal Controls and SOPs:

We have established well-defined Standard Operating Procedures (SOPs) and internal control mechanisms to minimise process inefficiencies and operational lapses.

Fraud Risk Management:

A robust internal audit framework, coupled with a

strong whistleblower policy, enables early detection and prevention of fraudulent activities.

Information Technology Risk

With increasing reliance on digital systems, technology risk management remains a key priority.

Cybersecurity Infrastructure:

We have implemented multi-layered cybersecurity measures, including endpoint protection, real-time threat detection, and network monitoring systems, to safeguard our IT

infrastructure.

Data Security and Compliance:

Our systems are aligned with industry best practices for data protection, ensuring secure handling of customer information and regulatory compliance.

Digital Transformation Risks:

As we continue to enhance our PhyGital model, we actively manage risks related to system integration, data accuracy, and digital adoption.

eKYC and Automation:

Technology-enabled onboarding processes, including

biometric-based eKYC, have improved efficiency, ensured compliance, and reduced operational risks.

Our investment in technology,

automation and risk controls helps

reduce operational risk, improve

efficiency and maintain secure, reliable

services across our expanding branch

and customer network.

Scalability Risk Management:

As branch expansion and customer acquisition accelerate, we continue to focus on maintaining operational discipline, staff training, and process standardisation across locations.

Business Continuity Planning (BCP):

We maintain comprehensive disaster recovery and

contingency planning frameworks to ensure uninterrupted operations in the event of unforeseen disruptions.

Environmental, Social, and Governance (ESG) Risk

We recognise the increasing importance of ESG

considerations in shaping long-term business sustainability.

Environmental Risk:

Climate-related risks, such as extreme weather events and resource constraints, may affect MSME borrowers and their supply chains. We are gradually integrating such factors into our risk assessment framework.

Social Impact:

Our business model promotes financial inclusion by

supporting underserved MSMEs, particularly in Tier II and Tier III cities, contributing to inclusive economic development.

Governance:

We maintain high standards of corporate governance, ethical conduct, and transparency, ensuring accountability to all stakeholders.

Compliance and Reputational Risk

We maintain a strong compliance framework to ensure

adherence to all regulatory guidelines, including those issued by the Reserve Bank of India and other statutory authorities.

Regulatory Monitoring:

Continuous tracking of regulatory developments ensures the timely implementation of changes and alignment with evolving NBFC regulations.

Ethical Practices:

A well-defined code of conduct, strong governance policies, and transparent reporting safeguard the Companys reputation.

Customer-Centric Approach:

We prioritise fair practices, transparency, and customer grievance redressal mechanisms to maintain trust and credibility.

Continuous Monitoring and

Evolution

Our risk management framework is dynamic and continuously evolves in response to emerging risks and changing market conditions. During FY2026, we have enhanced our focus on:

y Advanced predictive analytics for credit risk assessment and portfolio monitoring

y Integration of macroeconomic and geopolitical risk factors into decision-making

y Strengthening ALM and liquidity frameworks in a volatile interest rate environment

y Enhanced cybersecurity investments to

address evolving digital threats

y Climate risk integration into long-term

portfolio evaluation

Through our comprehensive and forward-looking risk management framework, we remain committed to maintaining financial stability, safeguarding stakeholder interests, and supporting sustainable growth. Our focus on secured lending, diversification, disciplined underwriting, and proactive risk

monitoring positions us well to navigate

uncertainties arising from both domestic and global macroeconomic developments.

Fraud Monitoring and

Control

We continue to maintain a robust and proactive Fraud Monitoring and Control framework to safeguard the integrity of our operations and ensure adherence to evolving regulatory requirements. With the increasing scale of operations and greater adoption of digital processes, fraud risk management remained a key focus in FY2026.

The Company has a well-defined

whistleblower mechanism that enables employees and stakeholders to

report suspected fraudulent activities confidentially and securely, without fear of retaliation. This framework promotes a culture of transparency, accountability, and ethical conduct across the

organisation.

Fraud investigations are conducted

through a structured, rigorous process to identify root causes, systemic gaps, and control weaknesses. Learnings from such investigations are used to strengthen internal processes and implement

corrective and preventive actions to minimise recurrence.

We have constituted dedicated Fraud Prevention Committees comprising

members of senior management and

the Board, which periodically review significant fraud cases and emerging risk patterns. These committees play a critical role in strengthening internal controls, enhancing monitoring mechanisms, and ensuring alignment with the Companys risk appetite.

The Internal Audit function continues to play a pivotal role in fraud risk

management. Through a risk-based audit approach, periodic audits are conducted to detect anomalies, assess control effectiveness, and ensure

compliance with internal policies and regulatory guidelines. Key findings and risk indicators are escalated to senior management and the Board for timely action.

In line with evolving risk dynamics, we have further strengthened our

technology-led fraud detection

capabilities. Advanced analytics, rule- based engines, and real-time monitoring systems are increasingly being used to

identify unusual transaction patterns and potential fraud indicators early, enabling swift intervention.

Additionally, regular employee training and awareness programmes are

conducted to sensitise teams to emerging fraud risks, particularly in digital and remote transaction environments. This continuous focus on capability building enhances the organisations ability to detect, prevent, and respond effectively to fraudulent activities.

Through strong governance, technology integration, and a proactive risk culture, we remain committed to maintaining a resilient fraud control framework

in an increasingly complex operating environment.

Our proactive fraud management framework combines advanced analytics, real-time monitoring and strong governance, helping us detect emerging risks early, strengthen internal controls and safeguard the trust of our customers and stakeholders.

Information Technology

During FY2026, we continued to strengthen our technology capabilities, recognising Information Technology (IT) as a key strategic enabler of scalable growth, operational efficiency, and superior customer experience. Our phygital operating model remains central to our business, seamlessly integrating digital platforms with personalised, branch-led engagement to support end-to-end processes across loan origination, underwriting, collections, risk management, and audits.

Core Technology Architecture and Infrastructure

During the year, we strengthened our core systems through migration to an Oracle-based database, enhancing

scalability, stability, and the ability to handle growing transaction volumes. We also introduced an Intermediate Banking System (IBS) middleware layer that

enables seamless, real-time integration with external partners, payment gateways, and compliance systems.

We have also adopted a frugal tech scale strategy that balances innovation with cost efficiency. As part of this

approach, we have developed and

deployed over 200 APIs, enabling

seamless integration across internal systems and external vendor platforms. Our proprietary Sahayak CRM platform continues to play a critical role in lead management and operational oversight,

providing real-time dashboards, geo- tagging capabilities, and OTP-based

verification to track sourcing effectiveness and branch performance.

Also, we made steady progress in our cloud migration journey, improving

system scalability, strengthening data security, and optimising infrastructure costs.

Digital Transformation and

Customer Experience

Our digital transformation initiatives continue to focus on enhancing customer convenience while improving operational efficiency. During FY2026, we successfully implemented a fully paperless gold loan process, significantly reducing customer processing time and improving branch- level productivity.

We have also transitioned to digital

welcome kits, reducing paper

consumption and enabling faster and more efficient onboarding. Customer acquisition processes have been further strengthened through Aadhaar-based eKYC, online PAN verification, and a

Business Rule Engine (BRE), enabling real-time customer segmentation and automated underwriting decisions.

Our mobile-enabled platforms and

self-service portals have been further enhanced, providing customers with greater control over loan management, repayment tracking, and service requests. These initiatives have contributed to improved customer engagement, faster turnaround times, and a more seamless user experience.

Cybersecurity and Data Governance With increasing digital adoption,

cybersecurity and data governance

remain a key priority. During FY2026, we continued to maintain our ISO 27001:2022 certification, reaffirming our commitment to global best practices in information security management.

We operate a 24x7 Security Operations Centre (SOC) to enable continuous

monitoring, real-time threat analysis, and risk-based incident response. Our cybersecurity framework has been further strengthened by deploying Xtended Detection and Response (XDR) and

Endpoint Detection and Response (EDR) systems, along with enhanced access governance through Active Directory integration.

To ensure business continuity and

resilience, we maintain a mirrored data infrastructure between our primary

data centre in Mumbai and our disaster recovery (DR) site in Hyderabad. Regular quarterly DR drills are conducted,

including full-scale simulations where live operations are shifted to the secondary site, ensuring preparedness for potential disruptions.

Operational Efficiency and

Automation

We have continued to leverage technology to drive operational efficiency across the organisation. Robotic Process Automation (RPA) has been deployed across key

back-office processes, enabling faster processing, improved accuracy, and

reduced manual intervention.

Advanced data analytics have been

embedded across the loan lifecycle, from lead generation and underwriting to

collections and delinquency management. These analytics capabilities provide early warning signals and support data-driven decision-making, enhancing portfolio monitoring and risk management.

Our continued investments in technology are reflected in increased capital

expenditure, with technology and

software-related costs rising to Rs.35.21 million in FY2026, underscoring our

commitment to building scalable, future- ready digital infrastructure.

Future Technology Roadmap

Looking ahead, we remain focused

on further strengthening our digital

capabilities by adopting automation, selective AI-driven analytics, and scalable cloud-based solutions. We continue to enhance our in-house digital ecosystem and API-driven architecture, enabling deeper system integration, improved operational efficiency, and more effective data-driven decision-making.

Our strategic focus is on building a

self-reliant, technology-enabled lending platform where technology, including targeted AI use, supports business

transformation while maintaining

strong operational discipline. Through continued investments in analytics,

process automation, and cybersecurity resilience, we are well-positioned to

adapt to evolving customer expectations and sustain our competitive edge in an increasingly digital financial services landscape.

Internal Control System, Adequacy and Compliance SBFC Finance Limited maintains a robust, well-structured, and adaptive internal control framework designed to ensure operational efficiency, regulatory compliance, and the integrity of financial reporting. The internal control system is commensurate with the scale, complexity, and nature of the Companys operations. It is aligned with the principles outlined in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

The Company has established comprehensive controls across all critical business processes, including loan origination, credit underwriting, collections, risk

management, treasury operations, and financial reporting. These controls are

designed to safeguard assets, ensure that transactions are properly authorised and recorded, and maintain the accuracy and reliability of financial information.

The Internal Audit function operates under a Risk-Based Internal Audit (RBIA)

framework, in line with regulatory expectations. The Audit Committee approves audit plans and focuses on high-risk areas, ensuring continuous evaluation of

control effectiveness. The Company continues to leverage data analytics, automation tools, and system-based controls to strengthen real-time monitoring, enhance

reporting capabilities, and improve the overall control environment. Audit findings, observations, and recommendations are periodically reviewed by the Audit

Committee, which also holds independent discussions with internal auditors to ensure objectivity and transparency.

The compliance framework ensures adherence to all applicable regulatory

requirements, including those prescribed by the Reserve Bank of India under the Scale-Based Regulation framework, the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, and the provisions of the Companies Act, 2013. The Company utilises a system-driven compliance

monitoring tool to track regulatory obligations and ensure timely adherence.

Strengthening of Anti-Money Laundering (AML) and Know Your Customer (KYC)

processes remains an ongoing focus area, aligned with evolving regulatory

expectations.

The Company also maintains strong information security and IT governance practices. As an ISO 27001:2022-certified entity, it follows stringent cybersecurity protocols, with periodic assessments, including Vulnerability Assessment and Penetration Testing

(VAPT), to ensure system robustness and data protection.

In terms of governance and

transparency, the Company has a well- defined whistleblower mechanism and vigil framework that enables stakeholders to report concerns

confidentially. The effectiveness of this mechanism is demonstrated

through its active utilisation and

timely resolution of reported cases. The Board of Directors confirms that adequate systems and processes are in place to ensure compliance with all applicable laws and that such systems are operating effectively.

Further, the statutory auditors, M/s. M M Nissim & Co. LLP have issued unmodified opinions on the adequacy and operating effectiveness of the Companys internal financial controls over financial reporting for the most recent audited periods. The Company continues to apply its accounting policies consistently, in line with

applicable accounting standards and past practices, ensuring transparency and comparability in financial

reporting.

Through continuous strengthening of its internal control and compliance framework, SBFC remains committed to maintaining high standards of

governance, accountability, and

financial discipline.

Through SBFC Gurukul, we have trained over 538 youth and

achieved an absorption rate of approximately 48%, helping us

build a future-ready talent pipeline while creating meaningful

employment opportunities for underserved communities.

Human Resources and Industrial Relations

At SBFC, we recognise that our people are the cornerstone of our growth and long- term success. Our human resources strategy focuses on building a high-performance, customer-centric, and agile workforce that supports our expanding business operations while maintaining strong governance and employee engagement practices.

Workforce Composition and Growth

During FY2026, we continued to strengthen our workforce in line with our branch

expansion strategy and growing operational scale. As of FY2026, our employee base stood at approximately 5,055 employees, reflecting a steady increase driven by front- loaded branch expansion during the year. Each new branch addition typically requires 8-10 employees, resulting in a calibrated increase in headcount aligned with business growth.

Despite a cautious macroeconomic environment, we maintained stable hiring

momentum to ensure that our distribution network and operational capabilities remain adequately staffed to support future growth.

Employee Ownership and Incentives

During the year, we further strengthened our employee engagement and retention framework through expanded equity-based incentive programmes. The Board approved the SBFC Stock Option Policy 2025 - I, comprising a pool of 12,100,000 stock options, reinforcing our commitment to aligning employee interests with long-term shareholder value creation.

During the FY 2026, the Company granted 9,838,000 stock options to eligible employees under SBFC Stock Option Policy 2025 - I and 4,997,000 stock options under SBFC Stock Option Policy 2024 - I. The grant of stock options has strengthened employee ownership and fostered a culture of long-term value creation.

Capacity Building and Training

We continue to invest in structured training and skill development initiatives to build a future-ready workforce. Our flagship programme, SBFC Gurukul, has trained over 538 youth from underserved backgrounds, with an absorption rate of approximately 48%, enabling the Company to create a sustainable talent pipeline while supporting inclusive growth.

Diversity, Well-being, and Employee Engagement

We remain committed to fostering a diverse and inclusive workplace. Employee well- being remains a key focus area, with initiatives such as regular health check-ups, mental health awareness programmes, and multicultural engagement activities designed

to promote work-life balance and strengthen organisational culture. These efforts

contribute to higher employee satisfaction and retention.

As we deepen our presence in the large and underpenetrated Rs.5 lakh to Rs.30 lakh MSME

lending segment, we are

strengthening our secured

lending franchise, enhancing operating efficiency and

creating a foundation for

sustainable growth and risk- adjusted returns.

Compliance and Industrial

Relations

The Company maintains strong adherence to all applicable labour laws and

regulatory requirements. During FY2026, we ensured 100% coverage of employees under mandatory training programmes, including POSH (Prevention of Sexual Harassment), cybersecurity awareness, and the Code of Conduct.

The implementation of the Code on Social Security (Labour Code) resulted in a one- time financial impact of approximately Rs.3.09 crore during the year, reflecting our commitment to regulatory compliance and employee welfare.

Industrial relations across the

organisation remained stable and

harmonious throughout the year, with no significant disruptions reported. We continue to engage proactively with employees, fostering a transparent, collaborative, and performance-driven work environment.

Forward-Looking Statements & Strategic Outlook

Strategic Direction and Growth Outlook

Having successfully transitioned through its initial growth phase, the Company is now entering a more institutionalised and scalable phase of expansion, with a sharper focus on sustainable growth, operating efficiency, and risk-adjusted returns. The strategic outlook for FY2027 and beyond is centred on strengthening the core secured lending franchise, enhancing unit economics, and maintaining portfolio quality.

The Company continues to operate in a large, underpenetrated MSME lending market, particularly in the Rs.5 lakh to Rs.30 lakh ticket-size segment, where structural demand remains strong. This segment is expected to witness sustained long-term growth,

supported by increasing formalisation, improving credit access, and continued economic expansion. SBFC remains well-positioned to capitalise on this opportunity through its focused business model and strong distribution capabilities.

Distribution Strategy and Operating Efficiency

The Companys growth strategy is increasingly focused on enhancing the productivity of its existing distribution network, rather than relying solely on rapid branch expansion. While selective addition of new branches will continue, the emphasis remains on

improving branch-level efficiency, deepening market penetration, and optimising

customer acquisition.

Operationally, the Company aims to drive operating leverage through disciplined cost management and to leverage its existing infrastructure and technology investments. Continuous efforts are being made to improve cost efficiency, enhance process

automation, and optimise resource utilisation, thereby supporting a healthy margin over the medium term.

In parallel, the Company intends to further diversify its funding profile by reducing reliance on traditional bank borrowings and exploring alternative sources, such

as capital markets and securitisation, thereby strengthening liquidity and funding resilience.

Product and Credit Strategy

The Companys product strategy remains anchored in secured lending, with

MSME loans forming the core portfolio and gold loans providing an important complementary segment. The gold loan business is expected to continue acting as a high-yield, liquid, and counter-cyclical buffer, supporting portfolio stability.

From a credit perspective, the Company has adopted a more calibrated,

quality-focused approach, with tighter underwriting filters and enhanced

risk-assessment frameworks. Greater emphasis is being placed on borrower quality, collateral strength, and portfolio diversification to mitigate emerging risks. Strategic initiatives such as co-origination partnerships will continue to support growth while optimising capital efficiency.

Technology and Digital

Transformation

The Companys technology roadmap for the coming years is focused on further strengthening its phygital ecosystem through intelligent automation, advanced analytics, and API-driven architecture. Investments will continue in enhancing digital capabilities across customer

onboarding, underwriting, collections, and customer servicing.

Future initiatives include adopting

AI-driven credit assessment tools,

automated workflows, and advanced customer engagement platforms to

improve efficiency, reduce turnaround times, and lower operating costs. These initiatives are expected to strengthen further the Companys competitive

positioning in technology-driven financial services.

With a strong foundation, diversified portfolio, disciplined risk management practices, and a scalable operating model, SBFC is well-positioned to sustain its growth trajectory. The Company remains focused on delivering consistent, risk- adjusted growth, strengthening its market position, and creating long-term value for all stakeholders.

By combining a secured lending focus with stronger underwriting, portfolio diversification and technology-led decision-making, we are enhancing portfolio resilience, improving capital efficiency and creating a scalable platform for consistent, risk-adjusted growth and long-term value creation.

Cautionary Statement

This document contains forward-looking statements that reflect the Companys current expectations, beliefs, assumptions, and estimates regarding future business performance and economic conditions. These statements are

inherently subject to risks and uncertainties, many of which are beyond the Companys control. Actual results may differ materially from those projected due to a range of factors, including but not limited to global commodity price fluctuations, regulatory changes, climatic conditions, input cost pressures, and changes in consumer behaviour or government policy.

The Company undertakes no obligation to publicly revise or update any forward- looking statements, whether due to new information, future developments, or otherwise. These statements should be read in conjunction with the financial and operating performance data and the risk factors identified in the Risk Management Framework outlined in this Annual Report.