Halkbank profit plummet 26 percent in first quarter

Halkbank profit plummet 26 percent in first quarter

The drop in interest rate revenue and other commercial losses have pushed state lender Halkbank’s profit down by over a quarter in the first three months of the year.

The net profit of the bank, which has been under scrutiny since corruption allegations surfaced against its former CEO and Iranian business ties, were 530.4 million Turkish Liras ($250 million) in the first quarter of 2014, marking a 26 percent slump from the same period last year, according to a stock exchange filing late on April 28.

The bank that recorded 181.2 million liras in profits in the first quarter of 2013 posted an 80 million lira loss during the same period of 2014.

The first quarter figures also showed the extend of the impact of the Central Bank’s massive interest rate hike that came at the end of January, as Halkbank’s net interest rate income contracted by 7 percent year-on-year, becoming 1.16 billion liras.

In a statement released after the announcement of the latest results, Halbank CEO Ali Fuat Taşkesenliğlu said the bank’s balances were adversely affected by the interest rate hikes.

The transfer of gold and money to Iran through Halkbank has been under the spotlight as part of the corruption investigation launched on Dec. 17. The investigation charged businessman Reza Zarrab with forming a crime ring that bribed officials, including former Cabinet members and former Halkbank chief executive Süleyman Aslan.