Page 46 - TURKRptDec21

6.1.4 Banks news
Since July 2016, when Turkey was hit by a failed coup attempt, consequences of which fuelled an ongoing overall economic collapse, Turkey’s banks have been under political pressure to boost lending.
In 2018, Erdogan’s son-in-law Berat Albayrak became finance minister and tested the limits of political pressure on local lenders.
The currency crisis that began in 2018 added to the economic collapse process. Following the coronavirus (COVID-19) shock in 2020, the economy has entered a new period of jeopardy.
Since Albayrak’s resignation in November 2020, the banks have enjoyed some relative relief. However, with the latest rate-cutting cycle launched in September at the behest of President Recep Tayyip Erdogan, there is no guarantee that the political pressure in the drive for growth at all costs ahead of the next election, due by June 2023, will not add to the private banks' difficulties.
From their 2018 and 2019 profits, the banks were not allowed to distribute dividends, while they were allowed to distribute 10% of their 2020 profits. The dividend ruling for this year is awaited.
Debt restructurings and non-performing loans (NPL) are seen as amounting to an inexorable headache for Turkey’s banking industry in the coming period. The country's banks also have exposure to public private partnership (PPP) projects.
In 2016, Turkey's banking industry was still among the country's strengths. Currently, it is seen as among the country’s weaknesses.
In 2016, the banks were Borsa Istanbul flagships. As things stand, the share of foreign investors in the stock exchange's banking stocks hovers at the bottom level.
The Turkish banking industry’s strengthening process was launched following the great banking collapse of 2001. During the 2000s, the majority of the country’s banking system was sold to foreign buyers.
Since 2016, there have been persistent rumours of foreign owners wanting to flee their holdings in Turkish banks. Most speculation has not gone beyond 'rumours and murmurs', but Russia’s Sberbank (Moscow/SBER) managed a successful exit from Denizbank, while UniCredit and Garanti’s institutional stakeholders at Borsa Istanbul appear to be making for the exit at any cost.
46 TURKEY Country Report December 2021 www.intellinews.com