The eight state banks in Sri Lanka accounted for 49 percent of the assets of the total banking sector as at end 2013. Among these, Bank of Ceylon (BOC) and People’s Bank (PB) are the two largest licensed commercial banks with an asset base of Rs 1,193.6 billion and Rs 926.6 billion, respectively. The National Savings Bank (NSB) is a licensed specialized bank with an asset base of Rs 655 billion while the other five specialized licensed banks, namely, State Mortgage and Investment Bank (SMIB), Pradeshiya Sanwardena Bank PSB), Lankaputra Development Bank (LDB), Sri Lanka Savings Bank (SLSB) and HDFC Bank (HDFC) have an aggregate of Rs 149.2 billion in assets. Out of the total branch network in the banking sector, the state banks accounted for 33 percent of branches leading the way towards achieving Government’s policy of improving financial accessibility and inclusiveness. The geographic penetration was further extended with state banks opening a total of 275 banking outlets and service delivery points in 2013, increasing the total branches and outlets to 2,113 in the state banks sector. BOC is the only Sri Lankan bank with an international presence with branches in Chennai, Male, Seychelles and a subsidiary in London.
The deposit base of the state banks surpassed Rs. 2 trillion during 2013. Profit after tax of these banks deteriorated by 25 percent in 2013 as non-performing advances increased by 71 percent largely contributed by the non-performing gold backed loans, consequent to the sharp decline in international gold prices.
In the background of policy initiatives introduced in 2012 towards strengthening macroeconomic conditions, the banking industry was compelled to moderate credit growth. The slowdown in credit growth continued in 2013 as well, as the pawning portfolios declined. Hence, the asset base of the state banks grew by 15 percent compared to 23 percent in 2012. The total assets of the banking industry increased by 16.5 percent to Rs. 5.9 trillion by end 2013.