Annual Report 2008 - Ministry of Finance and Planning

3. Performance of Public Enterprises
154
The highest NPL Ratio reported at UDB amounting to 6.5
per cent. Only WDB (3.7 percent and RaDB (4.2per cent)
maintained a NPL below the average of 4.5 percent.
All RDBs except RaDB reported a declining trend in NPL
Ratio through out the entire period. However, RaDB reported
a marginal increase in NPL in 2008.
Chart 3.11
Table 3.14
Capital funds of RDBs
2007 2008 Change
(Rs. mn) (Rs. mn) (%)
RuDB 717 806 12.4
WDB 709 1,019 43.7
SDB 368 447 21.5
UDB 228 250 9.6
RaDB 271 314 15.9
KDB 280 303 8.2
Total 2,606 3,139 20.5
Source: Bank’s Annual Accounts
Age analysis of RDB’s non-performing advances reveals that
more than 56.6 per cent non-performing advances are over
18 months. This is mainly due to difficulties in realizing the
securities. However, adequate provisions have been made in
2008 covering 67.6 percent NPLs. Accordingly, net exposure
of bank (net non performing advances) has declined to Rs.
393 million in 2008 from Rs. 394 million in 2007.
Chart 3.12
Total capital funds employed in RDB amounted to Rs. 3,139
million by the end of 2008 indicating an increase of 20.5
per cent over 2007. The highest capital growth reported
in WDB. The Capital Adequacy Ratio (CAR) of RaDB was
below the minimum requirement of CBSL and reported at
8.94 per cent. Other RDBs maintained CAR through low risk
weighted assets.
Liquidity Position of RDBs
By the end of December 2008, all RDBs except RaDB
maintained the required Statutory Liquid Assets Ratio (SLAR)
of the Central Bank of Sri Lanka. The consolidated Credit
Deposit Ratio of RDBs amounting 104.7 per cent, reveals
that banks have granted loans more than the deposits they
have mobilized. The RBDs are meeting higher demand for
credit by borrowing from outs side. The sector has borrowed
Rs. 3,109 million by end of 2008 indicating a slight reduction
of 5.0 percent over previous year. RDBs face to the liquidity
problem due to the funding loans with long –gestation such
as housing loans using short-term borrowings.
Total deposits mobilized by RDBs registered a growth of 17.9
per cent over the previous year, amidst the competition of
other banks. WDB mobilized the highest deposits amounting
to Rs 7,218 million or 27.8 percent of total deposits of the
sector. The entirety of RDB’s income constituted with
the interest income from its loan portfolio and interest
Ministry of Finance and Planning Sri Lanka
Annual Report 2008