Credit Snapshot

Sri Lanka's state minister of defence Ruwan Wijewardene (L) takes part in a press conference in Colombo on April 24, 2019. - A Sri Lankan security dragnet hunting those responsible for horrifying bombings that claimed more than 350 lives has scooped up a further 18 suspects, police said April 24, as pressure mounted on politicians to explain why no one acted on intelligence warnings. (Photo by ISHARA S. KODIKARA / AFP) (Photo credit should read ISHARA S. KODIKARA/AFP/Getty Images)

Aug 27, 2013 (LBO) – Sri Lanka’s Nations Trust Bank expects loan growth to pick up towards the end of the year but the lender will be cautious and maintain liquidity, a top official said. “We estimate some revival in credit demand by fourth quarter of this year,” NTB chief executive Renuka Fernando told an investor forum.

“Whilst that will help us grow our assets book, one thing we are very conscious of and we have a prudent approach is liquidity.

“We will maintain good liquidity levels, as there is strife going on especially in India and some emerging markets.”

NTB’s loan book grew 5 percent to 77.3 billion rupees in the six months to June 2013 compared to a 12 percent growth in the first half of 2013.

Sri Lanka is recovering from balance of payments pressure caused by Central Bank accommodated credit growth in 2011 and 2012.

When a central bank ‘accommodates’ by injecting rupee reserves in to banks, credit growth outpaces deposit growth, leading to ‘foreign exchange shortages’ when the central bank credit eventually translate into imports.

Loan to deposit ratios of banks deteriorate.

When interest rates are raised to eventually stabilize the econo