Turkish banks spent all on loans in first half of 2017, now time to catch breath: TBB head

Turkish lenders gave “what they had” to offer loans to businesses in the first half of the year to give a boost to the economy and it is now time for lenders to take a rest in order to slash their operational costs, the head of the top banking association said.

Turkish Banks Association (TBB) President Hüseyin Aydın told a group of journalists on Aug. 8 that loan growth for this year is expected at 16-18 percent and profitability increase at 15-20 percent.

He said that Turkey’s banks gave strong support to economic growth in the first half of the year.

“We grasped a raid rise in the sector. We gave what we had to offer loans by using the legal limits to the end,” Aydın said at the meeting in Istanbul, as quoted by Reuters.

Economic growth is a strength for Turkey, so it should be sustained, he noted.

“We ran very fast in the first six months of the year. Now it is time for us to catch our breath, but we will never stop. Stability in global markets will make a positive impact on Turkey. There might be some ups and downs due to some global uncertainties. The key point here is to manage them well,” he added.

Aydın noted that Turkish banks offered almost all loans under the warrant of the Credit Guarantee Fund (KGF) to businesses.

“We have experienced a fruitful process. Some 313,000 clients have used 207 billion Turkish Liras ($58.6 billion) so far,” he added.

In March, Turkey raised the volume of the KGF by more than ten-fold to 250 billion liras in line with measures to boost the economy.

TBB Deputy President Ümit Leblebici said that banks’ profits were fairly high in the first quarter of the year compared to the same period in 2016, adding that normalization would start by the second quarter.

“The profitability growth will likely be at 15-20 percent by the year end,” said Leblebici.

Turkish banks’ net profit rose to 13.5 billion liras in the first quarter by a 65 percent year-on-year increase.

Their net profit was announced 25.4 billion liras in the first half of the year with a 33.2 percent increase compared to the same period in 2016.

Leblebici also said that deposit rates would likely start to decline.

“We have already started to see a relative decline in this quarter. The inflation rate will further push these rates down. It will not be surprising to see a nearly 8 percent inflation rate in the first quarter of 2018. This trend will push down the [deposit] rates,” he said, adding that the sector might see 13 percent in these rates by next year.

Aydın noted that the sector would do its best to slash operational costs in a bid to push down the rates.

TBB Secretary General Ekrem Keskin said the sector expected the Turkish economy to grow by 4-5 percent.

Կարդացէք նաև

Leave a Reply

Your email address will not be published. Required fields are marked *

Facebook Iconfacebook like buttonTwitter Icontwitter follow button