Lenders’ profits nearly halved in January
ISTANBULThe Turkish banking sector’s net profit in January fell 43.9 percent year-on-year to 1.415 billion Turkish Liras ($641.6 million), the banking watchdog said on March 10.
The sector’s equity profitability, which was 17.9 percent in last year’s same month, also plunged to 9.1 percent after falling by 8.8 percentage points in a year, according to the temporary figures released by the Banking Regulation and Supervision Agency (BDDK).
In January, the Turkish Central Bank raised all of its key interest rates in a dramatic move in an emergency policy meeting to defend a crumbling currency that is among the most vulnerable to another sell-off.
Higher interest rates, as well as a regulation introduced to raise the down payment on car loans by the BDDK, mounted the upheaval for the sector.
Despite the regulations and higher interest Turkish lenders’ loans also jumped by 34.8 to 1.08 trillion liras.
Meanwhile, the BDDK data announced yesterday showed the banks’ total assets had risen by 31.2 percent to 1.79 trillion lira.
The international rating agency Standard & Poor’s (S&P) recently warned that the rapid loan growth of recent years has made Turkish banks’ asset quality vulnerable to any potential economic slowdown.