Association advises Turkish banks to restructure debts up to 24 months

Association advises Turkish banks to restructure debts up to 24 months

ISTANBUL
Association advises Turkish banks to restructure debts up to 24 months

The Turkish Banks Association (TBB) on Oct. 8 advised lenders to restructure cash debts below 15 million Turkish Liras ($2.44 million) of businesses up to a 24-month installment due with a six month non-payment period under certain conditions.

This recommendation will be applicable for installment or spot loans with a final mature date sooner than April 30, 2019, TBB said in a note.

“Of businesses, whose total cash debt is less than 15 million liras [and not higher than 25 million liras - $4.07 million – along with non-cash risks], the following ones can apply for debt restructuring to banks for consideration: Those which have not faced any legal proceedings by any banks or financial institutions, did not charge any bankruptcy files, did not restructure any debt with the respective banks after June 30, 2018, and can show its capacity to rebound following the restructuring process,” read the statement.

The applications will be evaluated by each bank itself and concluded accordingly, TBB added.

About a quarter of all outstanding loans by Turkish banks can be restructured under the new recommendation, TBB chair Hüseyin Aydın said in an interview with private broadcaster NTV on Oct. 8.

“We are talking about cash debts worth around 400 million liras [$65.2 million]. To be sure, we do not expect all of these debtors will benefit from this plan,” he noted.

The advisory decision was made after the government’s new economic program had been discussed by the association board, according to the TBB statement.

“It has been seen that risks have relatively eased, fluctuations in money or currency markets have regressed and local or foreign investors’ confidence about Turkey has improved. We have assumed that the measures mentioned in the program would help the economic activity recover in a reasonable period,” it added.

Turkish banks, Turkish economy, debt restructuring