Credit Demand Slows In Retail, SME Sectors
A slow down in credit demand from both the Retail and SME sectors is currently visible in a bank’s lending pattern, its CEO designate told a forum in Colombo on Wednesday.
“We see a lessening in demand from those sectors,” Nations Trust Bank plc (NTB) CEO designate Renuka Fernando, said, in response to a question raised by a journalist at this meeting.
She was however confident of meeting Central Bank of Sri Lanka’s (CBSL’s) upper limit on credit growth, ie 18% from locally generated funds and the balance 5% from funds generated from overseas lenders, taking lending up to the 23% credit ceiling limit imposed by the regulator.
NTB’s credit growth in the first half (1H) of the year was 13%. Last year NTB’s loan book grew 30% year on year (YoY). CBSL, in order to avert a balance of payments crisis, amidst other policies and strategies adopted, has also placed an 18% cap on credit growth in banks this year, allowing them to increase it by a further 5% provided the balance is derived from foreign borrowings.
NTB, in this regard, plans to raise US$ ($) 30-35 million from overseas markets, of which US$ 13 million will be earmarked to uplift its Tier II capital, while the balance will be used for lending purposes.
Fernando said that they weren’t
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