Tuesday Oct 07, 2025
Tuesday Oct 07, 2025
Tuesday, 7 October 2025 02:26 - - {{hitsCtrl.values.hits}}
Sri Lanka’s banking sector assets grew 14.9% year-on-year (YoY) to Rs. 23.8 trillion in the second quarter of 2025, up from Rs. 20.7 trillion a year earlier, according to the Central Bank of Sri Lanka’s (CBSL) Financial Soundness Indicators (FSI) Report for Q2 2025. The report said the growth was primarily driven by increased investments, loans, and advances.
Gross loans and receivables rose 11.4% YoY to Rs. 12.3 trillion compared to Rs. 11 trillion a year ago, while banking sector investments increased 26.2% YoY to Rs. 9.9 trillion from Rs. 7.8 trillion.
Total liabilities of the banking sector expanded 14.4% YoY to Rs. 21.6 trillion in Q2 2025 compared to Rs. 18.9 trillion in the corresponding period last year. Total deposits grew 12.9% from Rs. 17 trillion in Q2 2024 to Rs. 19.2 trillion this year.
Banking sector borrowings rose 16.6% YoY to Rs. 1.48 trillion, while equity capital and reserves increased 20.4% YoY to Rs. 2.2 trillion during the quarter.
The report said the regulatory capital to risk-weighted assets ratio of the banking sector improved to 19.4% at the end of Q2 2025 compared to 18% a year ago, mainly due to higher growth in retained earnings.
The non-performing loans to total loans ratio of the banking sector declined to 12% from 12.8% a year earlier, indicating a gradual reduction in default risk. In absolute terms, gross non-performing loans increased 4.4% YoY to Rs. 1.46 trillion in Q2 2025 from Rs. 1.4 trillion a year ago.
The sector reported a Profit After Tax (PAT) of Rs. 187.8 billion in Q2 2025, recording a 68% YoY increase, mainly due to higher net interest income, which grew 26.8% YoY to Rs. 501.1 billion, the CBSL said.
