Turkey’s banking sector achieved its highest growth rate in the last six years in the first quarter of 2017, mainly thanks to a skyrocketing rise in the loan volume, according to the head of the Banks Association of Turkey (TBB).
TBB President and Ziraat Bank CEO Hüseyin Aydın said the sector grew 7 percent in the first three months of the year compared to the same period of 2016, including a significant rise in the country’s loan volume, especially in corporate loans.
According to TBB data, loans saw a 97 billion Turkish Lira increase in the first quarter of 2017, much higher than the 24 billion lira increase in the same period of 2016. The sector’s lira-based loans increased by 83 billion liras in the first three months of 2017, with around 63 billion liras of this amount used by businesses.
The sector’s personal loans also rose by 15 billion liras, some 60 percent of which was seen in housing loans.
Aydın said that if loans continue to grow at this speed, the sector may see a 25-30 percent boost in loan volume by yearend.
Saying key regulations have been made and economic growth has started to rise to an average of 4 percent, he predicted more rapid growth in the years ahead.
“We will see economic growth levels higher than 5 or 6 percent when global indicators see a further recovery. In the current environment, it is a big achievement of the Turkish real sector, its banking sector and the country’s economic administration to enable the economy to grow higher than 3 percent,” Aydın said.
TBB Acting President and TEB CEO Ümit Leblebici said Turkey’s banks had opened channels to greater lans.
“The Credit Guarantee Fund is a good mechanism that needs to be used properly. Naturally there are some bank clients who sometimes have difficulties in doing business and they need financial support to carry on. These supports can be offered by lenders. It would be no good for us to provide all support in a short time as we need to extend the risks and use our sources in an efficient manner,” Leblebici said.
Over 157,000 companies have obtained 114 billion liras ($31 billion) in loans under a new scheme to boost the economy through the Credit Guarantee Fund (KGF), Finance Minister Naci Ağbal said on April 12.
Under the framework of Small and Medium Business Development and Support Administration (KOSGEB) loans, around 5 billion liras in cash was recently added to the economy, said Ağbal.
Aydın said companies who had difficulties in reaching new financing had gotten relief thanks to these new mechanisms.