Banking Sector Lending Rates Hints a Comeback While Deposit Rates Continues to Fall

Sri Lanka’s banking sector’s Average Weighted Prime Lending Rate (AWPR) reached a new monthly high of 5.86 percent at-end April by gaining five basis points (bps) compared to the beginning of the month.

On a Weekly basis, AWPR for the week ending 30th April increased by 32 bps to 5.86 percent compared to the previous week.

At-end April, Sampath Bank had the highest AWPR among local banks at 7.38 percent followed by Seylan Bank at 6.85 percent, Union Bank of Colombo at 6.79 percent.

The State-owned Bank of Ceylon, People’s Bank along with Hatton National Bank, Commercial Bank of Ceylon, Pan Asia Banking Corporation, and NDB Bank maintained their AWPR below six percent.

Among foreign banks, Citi Bank recorded the lowest AWPR of 4.92 percent at-end April.

According to avilable data, the Average Weighted New Lending Rate (AWNLR) also gained marginally by two bps to 8.26 percent in March compared to the previous month.

However, the Average Weighted Lending Rate (AWLR) fell below the 10 percent mark in March to 9.91 percent.

In April, key rates offered to depositors by the banking sector continued to fall to new record-lows at the same time as the Banking sector moved to lower their cost funding and due to expansion of excess liquidity in the system.

The Average Weighted Deposit Rate (AWDR) fell by a 13bps to 5.07 percent and the Average Weighted Fixed Deposit Rate (AWFDR) fell by a 20 bps percent to 6.09 percent from a month ago.

In March, Average Weighted New Deposit Rate (AWNDR) and Average Weighted New Fixed Deposit Rate (AWNFDR) also continued to fall to new record lows. The AWNFDR fell below the five percent threshold in March.

The total outstanding market liquidity surplus rose to Rs.151.312 billion by end of April compared to the surplus of Rs. 86.334 billion at the beginning of the month.

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