Sri Lanka’s banking sector records a profit after tax of Rs. 74.6 billion
View(s):Sri Lanka’s banking sector recorded a profit after tax of Rs. 74.6 billion in 2013 around 9.7 percent drop from 2012 figure of Rs 82.7, officials said.
The net interest margin declined from 4.1 percent in 2012 to 3.5 percent in 2013 due to the increase in the share of high cost term deposits in total deposits, the moderation in credit growth and the increase in low yielding assets. Provisions for bad and doubtful debt and loans written-off increased to Rs.18.4 billion in 2013 from Rs. 6.3 billion in 2012
The commercial banks also given loans to Private firms amounting to Rs. 175.9 billion in 2013, they revealed. This was an increase of 7.5 percent compared to statistics in 2012, they said.
These companies had also borrowed Rs 69 billion from debt markets and this indicates that private firms were borrowing through alternative mechanism rather than direct bank borrowings, Swarna Gunarathne, head of economic research at Sri Lanka’s Central Bank said.
Several companies re-paid bank loans with 4-year fixed rate debt raised from capital markets and banks themselves were the biggest buyers of the securities, especially highly rated ones, she said.
Though banks were still funding the firms, the accommodation would be listed in the balance sheet under securities holdings rather than loans to customers.