Sri Lanka's Banks are unlikly to return to Pre-covid proftiability levels next year, Fitch Ratings said in a special report.
"We expect this trend to continue in to 2021, albeit at a slower pace. Deteriorating asset quality and the associated higher credit costs are expected to keep banks' profitability lower in 2021 than pre-2019 levels, despite improvement from 2020 profitability," the Rating Agency said.
It expects that sluggish economic activity, external and domestic vulnerabilities, muted private credit growth and the sovereign's weakened credit profile to pose significant downside risks to the operating environment for Sri Lankan banks.
The rating Agency lowered its assessment of the operating environment score for Sri Lankan banks to 'ccc' with negative outlook from 'b-' ...