Sri Lankan bank lending boost from polls spending

ECONOMYNEXT – Forthcoming elections could help boost lending by Sri Lankan banks if it leads to higher government spending, which has been usual in election years, said a new report from Oxford Business Group (OBG).

Banks are currently experiencing considerable change with the need to comply with new regulations, alongside the ups and downs of loan growth and economic policy, the report from the global research and consultancy firm said.

“A careful balancing act is being performed as a result, with those able to tread the narrow path recording healthy bottom lines and continued service expansion in 2018. The year ahead will likely see this trend continue,” the OBG report said.

“There is an expectation that an election year may see some fiscal loosening overall to the benefit of credit growth – particularly in the consumer segment.”

Oxford Business Group said that for banking sector growth, much depends on economic and political stability in the year ahead.

“Upcoming elections bring with them a widespread expectation of fiscal and monetary loosening, with GDP also set to grow more strongly. This may lead to an uptick in credit growth and general banking activity.”
(COLOMBO, March 27, 2019-SB)

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