Fitch’s outlook for the banking sector is negative, based on its assessment of a difficult operating environment.
This is reflected in an increase in Non Performing Loans(NPLs) following a period of rapid credit growth and some capitalisation pressures.
Structural factors, such as governance standards, GDP per capita and levels of human development, are high compared with the ‘B’ and ‘BB’ medians and continue to provide support to the rating.
In the United Nation’s Human Development Index, Sri Lanka ranks in the 61st percentile compared with the ‘B’ median of the 36th percentile.
On the World Bank’s composite governance indicator score, Sri Lanka ranks at a favourable 48th percentile against the ‘B’ median of the 31st percentile.
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