Sri Lanka, April 22 -- Sri Lanka's banking sector outlook for 2025 is said to be improving, according to Fitch Ratings, which also anticipated broadly stable operating conditions across most Asia-Pacific (APAC) banking system for this year.

However, it noted that a surge in US tariffs could threaten this assumption in some markets.

"The effect of the trade war on specific banking systems in the region will depend on the final tariff outcomes, their impact on local economic growth, banks' exposure to vulnerable sectors and potential for changes in fiscal, monetary or credit policy," it said in a commentary.

Alongside Sri Lanka, Vietnam's banking sector outlook is also listed as Improving in the emerging market cluster. Fitch said it co...