Credit Risk and Profitability of Banking Sector in Sri Lanka

This paper aims to investigate the impact of credit risk on profitability banking sector in Sri Lanka. The is measured with and Return Assets. At same time, quantified four indicators: Non-performing loan Ratio (NPLR), Loan Deposit (LDR), Net Charge off (NCOR), Capital Adequacy (CAR). Data from thirteen banks over eight years 2010 2017 was analyzed using panel data regression analysis. finding shows that Profitability Banking Sector Lanka has been determined by important determinants such as risk. study further finds non-performing loans have negative significant return assets. However, net charge-off ratio deposit are not variables for expanding bank's profitability. On other hand, CAR positively impacts returns suggested need strengthen management order preserve Lankan banks' current