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

Published

3 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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Flood warning issued to the Divisional Secretariat Divisions of Ganga Ihala Korale, Udapalatha, Doluwa, Udunuwara, Yatinuwara, Gangawata Korale, Harispattuwa, and Pathadumbara

Published

9 hours ago

2026/09/20

Priyan

Due to heavy rainfall received in the upper catchment areas of the Mahaweli River over the past few hours, there is a risk of minor flooding in the low-lying areas surrounding the Mahaweli River within the Divisional Secretariat Divisions of Ganga Ihala Korale, Udapalatha, Doluwa, Udunuwara, Yatinuwara, Gangawata Korale, Harispattuwa, and Pathadumbara.Residents living in the above mentioned areas and motorists using roads passing through these areas are urged to exercise extreme caution and remain highly vigilant regarding the prevailing situation.

Furthermore, residents living in close proximity to the Mahaweli River in these areas are advised to remain highly alert to the situation and take all necessary precautions to protect themselves from any potential flooding.The relevant disaster management authorities are requested to take all necessary measures in response to this situation.

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Landslide Red Alerts issued to the districts of Kandy, Kegalle and Nuwara Eliya

Published

9 hours ago

2026/09/20

Priyan

The National Building Research Organisation [NBRO] has issued landslide Red Alerts to the districts of Kandy, Kegalle and Nuwara Eliya effective from 14:00 hrs on 20.09.2026 To 14:00 hrs on 21.09.2026

Accordingly,
LEVEL III [RED] Land Slide early warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Pasbage Korale in the Kandy district, Dehiowita, Aranayake, Deraniyagala, Mawanella and Yatiyanthota in the Kegalle district and Kothmale West, Kotmale East, Ambagamuwa and Norwood in the Nuwara Eliya district

LEVEL II [AMBER] Land Slide early warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Padukka in the Colombo district, Nagoda, Thawalama and Neluwa in the Galle district, Bulathsinhala, Palindanuwara, Walallawita and Agalawatta in the Kalutara district, Ganga Ihala Korale in the Kandy district, Bulathkohupitiya and Kegalle in the Kegalle district, Akuressa and Pitabeddara in the Matara district, Thalawakele in the Nuwara Eliya district and Pelmadulla, Ratnapura, Ayagama, Kuruwita and Ratnapura in the Ratnapura district.

LEVEL I [YELLOW] Land Slide early warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Seethawaka in the Colombo district, Niyagama and Baddegama in the Galle district, Mirigama in the Gampaha district, Ingiriya in the Kalutara district, Udapalatha and Yatinuwara in the Kandy district, Galigamuwa, Warakapola and Ruwanwella in the Kegalle district, Kotapola, Pasgoda and Athuraliya in the Matara district, and Eheliyagoda, Kalawana and Elapatha in the Ratnapura district.

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Development projects can deliver results to the people more quickly when the political authority and the public service work together towards a common goal – PM

Published

11 hours ago

2026/09/20

Priyan

Prime Minister Dr. Harini Amarasuriya stated that development projects can deliver results to the people more quickly when the political authority and the public service work together towards a common, people-oriented objective.

The Prime Minister made these remarks while participating in a discussion held on Friday [September 18] at the Western Province Council Auditorium to review the progress of the development project to rehabilitate Rathmalana Kandawala Road and the drainage system on either side of the road, within the Dehiwala–Mount Lavinia Municipal Council limits in the Colombo District.

The project, which commenced on September 10, 2026, is scheduled to be completed before June 30, 2027. Implemented by the Provincial Road Development Authority (PRDA), the project includes the construction of a bridge at a cost of Rs. 64 million, the rehabilitation of the drainage system at a cost of Rs. 930 million, and the rehabilitation of the road at a cost of Rs. 115 million.

The Prime Minister also paid special attention to the progress of the responsibilities assigned to the Western Province Council, the Irrigation Department and the Ratmalana Divisional Secretariat in accordance with decisions taken at the previous committee meeting. Attention was also given to the current status of the plans being carried out by the Sri Lanka Land Development Corporation (SLLRDC), as well as the construction and maintenance activities being undertaken by the Provincial Road Development Authority (PRDA).

Commending the expedite and commendable progress of the project, the Prime Minister particularly appreciated the commitment demonstrated by officials of the relevant government institutions to work in close coordination with one another and in collaboration with the political authority.

The Prime Minister also emphasised the importance of taking measures well in advance to control flooding and minimise its impact on Colombo and several other districts in view of the rainy weather that may affect the Western Province during the latter part of this year.

The meeting was attended by the Chairman of the Colombo District Coordinating Committee and Member of Parliament Lakshman Nipuna Arachchi, Chairperson of the Ratmalana Divisional Coordinating Committee and Member of Parliament Samanmalee Gunasinghe, Chairman of the Roads Sub-Committee of the Colombo District Coordinating Committee Dewananda Suraweera, Mayor of the Dehiwala–Mount Lavinia Municipal Council Parakum Shantha, Chief Secretary of the Western Province K.G. Pradeep Pushpakumara, along with a number of government officials.

[Prime Minister’s Media Division]