State Banks account for 40% of total Banking Assets, 44% of Lending Portfolio at Rs. 2.8 Trillion – Report

July, 17, 2018

Whilst Sri Lanka’s state banks continued to dominate the country’s banking sector accounting for almost 40% of the total assets in the banking sector in 2017, state banks accounted for 44% of the lending portfolio of the banking sector at Rs. 2.8 trillion as at end 2017, which is an increase of 16% compared to 2016.

Outlining the performance of Sri Lanka’s government owned banks, the Department of Public Enterprises (PED) Annual review notes that the deposit base of the state banks increased by 17% to Rs.3.8 trillion as at end 2017 and is almost 52% of the total deposit base of the banking sector. Further the report highlights that state owned banks has paid Rs.20.9 billion as levy and Rs.765 million as dividends to the Government Treasury in the year 2017. The Bank of Ceylon (BOC), People’s Bank (PB) and National Savings Bank (NSB) alone possesses assets over Rs. 1 trillion each, accordingly. State banks profit has increased by 4% to Rs. 73 billion in 2017 over previous year.

PED annual review further points out that loan portfolios of BOC, PB and National Savings Bank (NSB) are highly dependent upon the exposure to the Government including State Owned Enterprise (SOEs), which hinder the ability to extend loan facilities to new developing sectors of the economy and diversification of the product portfolio. PED has suggested to improve credit quality and enhance recovery mechanisms in the report.