Business

Banking sector remains resilient amidst pandemic

  • Sector assets grow in 2020

  • Loan and advances grow by double-digit percentages

 

Despite the ongoing Covid-19 pandemic, the capital and liquidity buffers over the past years contributed the banking sector of the country to remain resilient, stated the Annual Report 2020 of the Central Bank of Sri Lanka (CBSL).

The sector has also been notably expanded in 2020 compared to the previous year. Banking sector assets for the year 2019 stood at Rs. 14, 442.1 billion, whereas assets for the year 2020 stands at Rs. 17,087.9 billion, according to the report.

In terms of the performance of the banking sector, it appears to be the most dominant asset of the financial sector of CBSL. They have had growth in loans and advances by 11.9%, investments by 40%, deposits by 21.6%, and statutory liquid asset DBU by 37.3%. At the same time, the gross non-performing loan (NPL) ratio and the capital adequacy ratio declined by 4.9% and 16.5%, respectively. Deposits were the dominant source of funding.

Regardless of the travel restriction measures that limited physically accessing the bank, investments and credits contributed to asset growth while providing services through technology. Also, the CBSL was able to be flexible enough to implement extraordinary regulations to licensed banks in supporting small businesses and individuals who were affected by the pandemic.