Problem loans recorded as closely watched at Turkish banks reached 382 billion Turkish liras ($ 48.8 billion), while there is an additional 151 billion TRY (19.3 billion billion dollars) in non-performing loans (NPLs), recently appointed Turkish Finance Minister Lutfi Elvan. , noted on December 10 during his 2021 budget speech to parliament.

The Turkish authorities do not provide actual data sets on the problem loans in question, known as Phase 2 loans.

Data sets are also not available on loans taken out under the State Credit Guarantee Fund (KGF) or on restructured loans.

NPLs are group at stage 3-4-5 under Turkish regulations, while performing loans are classified at stage 1.

Abstention

December 8, BDDK bank watchdog noted he had extended until June 2021 the regulatory abstention measures that allow local banks to registration a loan as an NPL after 180 days rather than 90 days.

In addition, banks must keep using the central bank’s average currency purchase rate over the past 252 days while calculating their capital adequacy ratios.

November 27, the quarterly report on financial stability of the central bank show that closely monitored loans amounted to about TRY 360 billion in addition to about TRY 150 billion from NPL at the end of September.

NPLs and closely monitored loans thus amount to TRY 510 billion, or 14.3% of globally TRY 3.56 trillion loan book, end of September.

Based on data from the BDDK, ready grew up to 3.62 billion TRY as of December 8 with a value of 152 billion TRY of NPL and an NPL ratio of 4.18%.

Elvan’s data showed that non-performing loans and loans on closing watch totaled TRY 534 billion, or 14.7% of total loans.

Fitch Ratings considers Stage 2 loans (10.5% of sector loans at end of 3Q20) and restructured loans (45% of Stage 2 loans) when assessing asset quality, it noted December 10 in its 2021 outlook for Turkish banks.

Banking sector equity

Overall equity of the Turkish banking sector Pink at TRY573 billion at the end of October against TRY569 billion at the end of September.

Problem loan figures do not include KGF loans or restructured loans as they are categorized as healthy loans.

The latest Financial Stability Report also showed that outstanding KGF loans stood at TRY 342.7 billion at the end of September.

Some TRY 35.4 billion in KGF loans are expected to be repaid in the fourth quarter and TRY 128.5 billion in 2021, according to the report.

December 8, the KGF said it would provide additional loans worth TRY 7.5 billion to small and medium-sized enterprises (SMEs).

The local banking sector ended up in a non-stop loan restructuring cycle since 2016.

On December 12, Akis Real Estate Investment Trust (AKSGY) listed in Istanbul noted in a stock market deposit he obtained a loan from HSBC Middle East to repay an outstanding loan of $ 23 million.

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