Maintaining robustness of banking sector crucial in Turkey: Şimşek
AA photoProtecting the robust structure of Turkey’s banking sector is of great importance for the country’s economy, Deputy Prime Minister Mehmet Şimşek has said, vowing to create new “permanent sources” for the sector in the upcoming period as sector players demand further balance sheet growth.
“It is of great significance for us to sustain the healthy structure of the banking sector ... We will continue to create permanent and long term sources for the sector through a series of steps in the coming period,” Şimşek said at a May 27 general meeting of the Banks’ Association of Turkey (TBB) in Istanbul, as quoted by Reuters.
He noted that current loan growth of around 30-40 percent was “not sustainable” and a smooth landing must be achieved despite the complaints of some sector representatives.
TBB President Hüseyin Aydın warned of a slowing down in the sector’s balance sheet growth, asking for an acceleration in returns on equity growth.
“Our sector’s balance sheet growth has been slowing down. We need to grow our balance sheets ... The share of loans in balance sheets has risen to 63 percent, and we need to increase our assets in order to continue to offer loans,” Aydın reportedly said.
He stated that Turkey’s banking watchdog, the BDDK, should act to lift regulations that are slowing equity capital growth.
Aydın said the share of personal loans was around 25 percent of the total, lower than prior estimates, while the sector’s non-performing loans were at “manageable levels.”