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NPLs seen peaking around 13-pct, some sectors hit up to 30-pct

Published

2 years ago

2023/12/3

ECONOMYNEXT –Sri Lanka’s non-performing loans after the latest currency crisis is showing signs of having peaked but some sectors are hit worse than others with problem loans dating back from Coronavirus moratoriums, a banking official said.

Hotels, transport and arts and entertainment sectors had bad loans of 30 to 20 percent, while the overall level was lower. There is a marginal set of borrowers whose loans had been re-structured at high rates and these could turn bad if no action is taken, they said.

“The good news is that our NPLs have now kind of slowed down,” Bingumal Thewarathanthri, who is chairman of Sri Lanka Banks’ Association, told the Sri Lanka Economic Summit 2023. “It was 13.6 percent. Now it is hovering around 13.1, 13.2 percent. The net is down to 7.2 from 7.8 percent. Very clearly we have come to the end of this process.”

Saying Sri Lanka’s NPLs were low around 2.5 percent in 2017, he added: “NPLs came down but suddenly went up in 2018 and 2019 because credit to private sector was double digit when the economy was growing at low single digits,” he said.

Meanwhile, Thewarathanthri said, Sri Lanka’s bad loans hit 15.8 percent in 1999, and that level was not reached in the current crisis. But some sectors are more badly affected than others

“In terms of sectors, tourism NPLs are 33 percent,” he said. “Very clearly some of the tourism sector enterprises will not recover. You can clearly see the stress in that sector. Transport and logistics is 30 percent. Disposable incomes have come down, less consumption, the sector is impacted. Some of our clients who went down during covid will never recover,” sadly.

“Interestingly arts and entertainment is also close to 20 percent. Again, when disposable income goes down there is an impact to arts and entertainment. You first eat.”

After the Easter Sunday blast, hotels were given relief. In 2020 more broad-based relief was given and extended.

“There are no standard moratoriums going forward,” Thewarathanthri said. “Banks are fully aware of who is in stress and there is a lot of restructuring happening as we speak.

There were three types of enterprises, that took moratoriums, he said. “Some took the moratoriums and somehow paid, They disposed some assets, they took cost action, they understood the size of the business what is possible, what is not possible. I would say close to half were actually have gone ahead and done that.

“There is a good 20 percent I would say who had taken the moratorium and done other things.They thought they can buy time and wait and they did not have to settle these loans. They are in stress. These firm with no cash flow are lobbying for more moratoriums.

There was a third sector which took moratoriums who were unable to settle due to due to inadequate cashflows. Some hotels had recovered close to 80 percent of pre-Covid level but were not fully recovered, but were managing to service the debt.

Many loans of the loans were restructured in the recent past at “very high rates”, which the banks had to look at again.

“That component I think all of us in the banking community will have to take a look at that component and see what more can be done,” he said.

“If there is no cashflow there is no payment. Period. We can celebrate the NPLs have come to the bottom but you never know. If that portfolio goes bad, that’s a good portfolio going bad.

“The promoters are good, the business models are good. But sadly the cashflows are not supporting. So that individual banks are actively looking at them and supporting them.”

Several other countries which had currency troubles are also hit.Ghana, a country which defaulted, amid a severe currency crisis, has about 20 percent bad loans.Bad loans in Bangladesh, which is going through ‘external stress’ was 10 percent, Thewarathanthri who is also Chief Executive of Sri Lanka’s Standard Chartered Bank said.

“There is stress in the banking systems post-Covid,” he said. “Central banks have done moratoriums. There is stress in the banking systems coming out of the moratoriums as well. What we have seen is actually larger companies have taken market share … and grown.”

Similar trends were seen in Sri Lanka, he said. “SME turnovers are down by seven to 30 percent in Asia. Some of our SMEs have completely gone down.”

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Sun directly overhead Dodanduwa, Rathgama, Yakkalamulla, Akuressa, Mulgirigala, Ranna, Kalamatiya and Ussangoda at about 12:13 noon today (05th April)

Published

7 hours ago

2026/04/5

Priyan

On the apparent northward relative motion of the sun, it is going to be directly over the latitudes of Sri Lanka during 05th to 15th of April in this year.

The nearest areas of Sri Lanka over which the sun is overhead today (05th) are Dodanduwa, Rathgama, Yakkalamulla, Akuressa, Mulgirigala, Ranna, Kalamatiya and Ussangoda at about 12:13 noon

Latest News

Heat Index at Caution Level in the Western, Sabaragamuwa, Southern, Eastern, North-western, Northern and North-central provinces and in Monaragala district

Published

8 hours ago

2026/04/5

Priyan

Warm Weather Advisory
Issued by the Natural Hazards Early Warning Centre
Issued at 3.30 p.m. on 04 April 2026, valid for 05 April 2026

The Heat index, the temperature felt on human body is likely to increase up to ‘Caution level’ at some places in the Western, Sabaragamuwa, Southern, Eastern, North-western, Northern and North-central provinces and in Monaragala district.

The Heat Index Forecast is calculated by using relative humidity and maximum temperature and this is the condition that is felt on your body. This is not the forecast of maximum temperature. It is generated by the Department of Meteorology for the next day period and prepared by using global numerical weather prediction model data.

Effect of the heat index on human body is mentioned in the above table and it is prepared on the advice of the Ministry of Health and Indigenous Medical Services.

ACTION REQUIRED
Job sites: Stay hydrated and takes breaks in the shade as often as possible.
Indoors: Check up on the elderly and the sick.
Vehicles: Never leave children unattended.
Outdoors: Limit strenuous outdoor activities, find shade and stay hydrated.
Dress: Wear lightweight and white or light-colored clothing.

Note:
In addition, please refer to advisories issued by the Disaster Preparedness & Response Division, Ministry of Health in this regard as well. For further clarifications please contact 011-7446491.

News

Global ‘Walk for Peace’ to be held in Lanka

Published

8 hours ago

2026/04/5

Thilina Walpola

The internationally recognized “Walk for Peace,” originating from the United States, is set to take place in Sri Lanka starting April 21, 2026, led by the Most Venerable Paññakara Thero and a delegation of twelve monks from the Maha Sangha, President’s Media Division said.

Spanning seven days across the island, this pilgrimage’s purpose and concept are guided by the Buddha’s teaching, “Caratha bhikkhave carikam bahujana hitaya bahujana sukhaya lokanukampaya” (Wander forth, O Monks, for the welfare and happiness of the many, out of compassion for the world).

This program aims to promote peace and lovingkindness within society. It serves as a practical demonstration that peace cannot be attained by force, but must be cultivated step-by-step through mindfulness.

The inaugural event of this program is scheduled to be held in Anuradhapura on April 21, 2026. A ceremony to receive the sacred sapling of the Jaya Sri Maha Bodhi will take place at 4:00 PM, followed by special religious observances at the sacred Ruwanweliseya premises at 5:00 PM.

Thereafter, the walk will commence from the ancient Dambulla Royal Cave Temple and proceed towards Kandy. Upon reaching Kandy, the Maha Sangha will pay their respects to the Chief Prelates (Maha Nayaka Theros) of the Malwatta and Asgiriya Chapters, before visiting the Sri Dalada Maligawa (Temple of the Sacred Tooth Relic) to receive blessings.

Throughout the journey, the procession will carry the sacred sapling of the Jaya Sri Maha Bodhi, along with venerated relics from the historic Nilagiri Cetiya, Madanwala Raja Maha Viharaya in Hanguranketa, Mahiyangana Raja Maha Viharaya, and the Hunupitiya Gangaramaya.

The walk will conclude at Independence Square in Colombo on April 28, 2026. Subsequently, the venerated relics and the sacred sapling of the Jaya Sri Maha Bodhi are to be carried from Independence Square to Gangaramaya Temple, Hunupitiya, Colombo by a procession.

The Sri Lankan coordination of the event is spearheaded by Venerable Melpitiye Wimalakirti Thera. The Government of Sri Lanka’s flagship national program, “Clean Sri Lanka,” serves as the principal state partner.

Additionally, the event receives extensive support from various state institutions, including the National Design Centre, the Tri-Forces, and the Department of Information.

At the conclusion of the seven-day walk, a special State Ceremony will be held at Independence Square in Colombo on April 28, 2026. Concurrently, a special exhibition showcasing Sri Lanka’s Buddhist heritage and traditional handicrafts will be organized by the National Design Centre at the Gangaramaya premises on April 28 and 29, 2026.

This exhibition will feature brass items (ceremonial fans, flags, statues, bowls, and pinnacles), lacquerwork (caskets and boxes), clay crafts (bowls and statues), palm leaf crafts (fans and sesath), natural dyeing of robes, Dumbara wall hangings, traditional drums, and traditional paintings.

The primary objective of this cultural program is to contribute Sri Lanka’s Buddhist and cultural heritage to a project in Texas, USA, where the Tripitaka is being inscribed in 10 languages and enshrined within 840 stupas to create a centre for Buddhist education.