Banking system soundness improves as credit expands: Central Bank Financial stability review 2025

The local banking sector demonstrated stronger resilience and improved performance during the first half of 2025, supported by the country's recovering macroeconomic conditions, the Central Bank said in its Financial Stability Review (FSR) 2025.

- 

According to the review released yesterday, the resilience of the financial sector improved compared to the same period of 2024, supported by favourable developments in domestic macroeconomic conditions in the wake of heightened global uncertainty and lingering effects of the recent economic crisis.

Against the improvement in domestic macrofinancial conditions, credit granted by financial institutions, particularly to the private sector, increased during the period under review. The Central Bank said this was supported by the easing pressure on balance sheets of households and firms with the expansion in economic output and subdued price levels.