Business
Risks for banks may rise on end of restriction on ISB investments : Fitch Ratings
The end of the suspension on Sri Lankan banks’ investments in international sovereign bonds (ISBs) issued by the Sri Lanka sovereign (CCC) has the potential to increase banks’ exposure to sovereign and foreign-currency funding and liquidity risks, says Fitch Ratings. Banks’ credit profiles are already significantly exposed to the sovereign, with Fitch-rated Sri Lankan banks having about a third of their combined assets exposed to the central government at end-2020. In addition, they face foreign-currency risks, including through their US dollar-denominated ISB investments.
The Central Bank of Sri Lanka (CBSL) on 16 June 2021 revoked the previous indefinite suspension on investments in ISBs by banks. Sri Lankan banks had invested heavily in ISBs, which prompted the CBSL to halt investments in ISBs by banks from December 2020, due to concerns about the pressure on the domestic foreign-exchange market through dollar outflows.
The CBSL now permits banks to purchase ISBs in the secondary market, provided this investment is funded by fresh overseas borrowings.The directive requires banks to adopt risk mitigation measures to bridge maturity mismatches that could arise. Fitch expects Sri Lankan banks to continue to face difficulties in accessing foreign-currency funding due to the sovereign’s low credit rating.
Foreign-currency borrowings declined to LKR881 billion by end-1Q21, from LKR984 billion at end-2019, accounting for 5.8% of sector assets. Refinancing needs remain high as short-term loans made up around 63% of the banking system’s external debt at end-2020.The latest directive stipulates that fresh offshore borrowings sourced to buy foreign-currency government securities have to be invested in both ISBs and Sri Lanka Development Bonds (SLDBs) in equal proportion, and as such would also contribute to increased investments in SLDBs by banks. Banks are the main investors in SLDBs, but their holdings of these securities declined 15% in 2020 to LKR448 billion.
Take-up in SLDBs by banks has been less than the higher-yielding ISBs, which are listed and more widely held. There are no limits on banks’ subscription to SLDB issuances.Fitch-rated Sri Lankan banks’ investments in ISBs and SLDBs accounted for 6.4% of their assets at end-2020. The extent of incremental investments in ISBs and SLDBs by banks remains to be seen, but Fitch expects the banks to add only a limited amount of ISBs and SLDBs.
This is due to the lower appetite of some banks to add to their exposure to foreign-currency government securities and potential funding access challenges. The risks to banks from their holdings of foreign-currency government securities are exacerbated by recent measures that have reduced minimum buffers, such as a reduction in the risk weights on foreign-currency claims on the government held by banks to 10% in 2021 from 20%, and cut in the loss-given-default rates to 10% from 20% when computing expected losses in 2021.
The ‘CCC’ rating on Sri Lanka reflects the sovereign’s challenging foreign-currency external debt repayment burden over the medium term, low foreign-exchange reserves, and high and rising government debt that gives rise to sustainability risks. Sri Lankan banks’ ratings continue to remain constrained by the sovereign credit profile, says Fitch Ratings.
Business
IIHS expands global nursing pathways
The International Institute of Health Sciences (IIHS) Multiversity is expanding its international education programmes with the aim of creating overseas employment opportunities for Sri Lankan nurses and allied health professionals while contributing to foreign exchange earnings.
Speaking to the media during a conference at IIHS Multiversity in Kerawalapitiya, Dr. Kithsiri Edirisinghe, CEO, Co-Founder and Dean of IIHS aid that the institute has established academic partnerships with overseas universities and higher education institutions, including the University of Surrey in the UK, Deakin University in Australia, Metropolia University of Applied Sciences in Finland, Asia e University in Malaysia and SUNY Canton in the United States.
Under its ‘Study in Sri Lanka, Graduate to the World’ model, students can complete foundational and diploma-level qualifications locally before progressing to international top-up degrees or overseas employment.
Dr Edirisinghe said the model could substantially reduce the cost of obtaining internationally recognised qualifications. It estimates that completing a four-year bachelor’s degree at the University of Surrey in the UK would cost about USD 145,700, including tuition and living expenses, compared with about USD 27,750 through the IIHS pathway in Sri Lanka.
Dr Edirisinghe said the institute’s focus on overseas deployment addressed both Sri Lanka’s economic needs and the growing global demand for healthcare workers.
“Our winning model is producing job-ready, registration-ready healthcare professionals who can seamlessly enter foreign healthcare systems,” he said.
IIHS, which began operations in 2002 as the American College of Health Sciences, established its institutional base in Welisara in 2008 and launched its purpose-built greenfield multiversity campus in 2023.
The institute said it has upgraded the qualifications of more than 5,000 government nurses, supported over 2,500 youth on international employment pathways and trained more than 1,000 allied health professionals. It has also carried out over 250 community health projects.
The institute has identified Germany and Japan among its target markets, with pathways planned for 2,000 nurses for Germany and a one-year preparation programme linked to around 4,000 healthcare positions in Japan.
Dr. Renuka Jayatissa, Vice-Chancellor and a specialist medical doctor, said demographic changes and the growing burden of non-communicable diseases were changing healthcare requirements in Sri Lanka.
Business
Sampath Bank launches Sri Lanka’s first community-powered book discovery platform at Colombo International Book Fair
Sampath GPay customers can enjoy 25% cash back on Book Fair purchases
Sampath Bank PLC has launched Sampath Book Finder, Sri Lanka’s first community-powered book discovery platform, giving visitors to the Colombo International Book Fair a faster and more seamless way to find the books they are looking for across the fair’s 150+ stalls, while also opening up new opportunities to discover titles recommended by fellow readers.
Introduced on the opening day of the Colombo International Book Fair on 25 September, Sampath Book Finder brings together digital innovation and the collective knowledge of readers to address a familiar challenge at one of Sri Lanka’s largest literary gatherings, where the scale of the fair can make locating a particular title a time-consuming exercise. When a book proves difficult to locate, visitors can access bookfairtracker.com or scan the designated QR code and submit a request to the community, allowing readers who have already spotted the title to share its location and help others find it without having to search stall after stall.
Commenting on the initiative, Milinda Weerasinghe, Chief Marketing Officer, Sampath Bank PLC, said, “At Sampath Bank, we believe meaningful innovation begins by identifying everyday challenges and creating solutions that make a real difference. Sampath Book Finder brings this thinking to the Colombo International Book Fair by turning the collective knowledge of readers into a real-time digital solution, empowering them to find what they are looking for, discover something new and help others do the same, while making the overall experience more convenient and connected.”
The platform also turns book discovery into a shared experience, allowing visitors to recommend books they encounter by sharing the title, publisher, hall and stall number, which enables fellow readers to discover sought-after titles and recommendations while making it easier to locate them within the fair.
Sampath Bank’s longstanding association with the Colombo International Book Fair also continues in 2026, marking more than 20 years of partnership, with the Bank serving as the Official Banking Partner for this year’s fair. As part of its presence at the event, SampathCards offer 25% cashback for Sampath GPay customers on their purchases and 3 months 0% instalment plans for book purchases via Sampath credit cards, while visitors can also access banking services through the Bank’s physical presence at the fair. Customers registering to open selected Fixed Deposits at the premises will receive an additional 0.25%, adding further value and convenience for visitors.
Business
CEAT expands premium retail network with Kurunegala outlet
CEAT Kelani Holdings has expanded its premium retail network with the opening of a new Shop-in-Shop (SIS) outlet, Sumidag Prime, on Negombo Road, Kurunegala.
Located near Welagedara College in Malkaduwawa, the outlet is the company’s 14th SIS premium outlet in Sri Lanka and is aimed at providing customers in the North Western Province with access to CEAT’s tyre range and professional vehicle servicing.
The new outlet marks an expansion of the longstanding partnership between CEAT and Sumidag, which was established by Ajith Karunarathna in 1986. The business joined CEAT soon after the tyre brand entered the Sri Lankan market and has since become a leading dealer and two-wheeler tyre distributor in the Kurunegala region.
The outlet, led by the next generation of the Karunarathna family under Chamod Karunarathna, features dedicated CEAT branding, upgraded interiors, tyre display racks and a customer lounge.
Customers can access a range of CEAT tyres as well as services including nitrogen and air inflation, wheel alignment and balancing, camber and caster adjustment. The outlet also offers alloy wheels and batteries.
CEAT Kelani said the SIS concept was part of its strategy to strengthen its regional retail presence while helping dealer partners provide a more professional and convenient customer experience.
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