Page 78 - TURKRptMay19

BIST-100, closed the day 1.19% higher while the banking shares index was up 2%. The capital injection through bond buying will provide state banks with fresh money to be passed on to consumers and businesses as cheap credit.
Lending by state-owned banks rose 8.1% in the first quarter of the year , while private banks expanded their books by 2.8% but their combined net income dropped as much as 76% to TRY587mn ($103mn) in the first two months of 2019, Bloomberg reported. The notes will qualify as Tier 1 or Tier 2 capital, the sources told the news service.
In February, Moody’s Investors Service warned that measures designed to increase loan growth at state banks were credit negative for the lenders. The rating agency said that moves by three public banks to offer some loans at below market rates or current inflation levels, as well as government requests that they sustain lending, “add unseasoned risk, and negatively affect margins.” Vakifbank cut rates on car loans, mortgages and general consumer loans below annual inflation rates, while Ziraat and Halkbank provided loans at below market rates to people struggling to pay credit card debts.
8.1.8 Banks news
On the external debt roll-over front, Akbank, Ziraat Bank and Eximbank concluded syndicated loan renewals since March despite the latest turmoil on the domestic financial markets prior to the local polls . Roll-over news from Garanti Bank and the others is awaited.
On April 11, state-owned Ziraat Bank’s Islamic banking unit Ziraat Katilim announced that it has obtained a $250mn, 367-day syndicated loan from a consortium of 17 lenders , including Bank ABC, Dubai Islamic Bank PJSC, Emirates NBD Capital Limited, Standard Chartered Bank and Warba Bank. It did not provide further details.
Turkey's Eximbank obtains $630mn syndicated loan. Turkey’s Eximbank has obtained a $630mn syndicated loan on the international markets in two tranches with maturities of one year and two years, respectively, Turkish Trade Minister Ruhsar Pekcan said on April 9 in a press release. Part of the loan, namely $184mn worth, was denominated in USD while the remaining €398mn was denominated in EUR. The two-year tranche is worth $84mn. The costs on the one-year tranche stood at Libor+2.75% and Euribor+2.65%, lower by 20bp compared to a syndicated loan signed last October, according to the statement. The loan was obtained from a consortium of 10 lenders from Europe, four lenders from the Far East and six lenders from Gulf, led by Mitsubishi UFJ Financial Group (MUFG). Eximbank has obtained syndicated loans worth $1.5bn, and such loans presently account for a 15% share in the lender’s overall external financing.
Denizbank 'unlikely to delist from Borsa Istanbul' after Emirates NBD takeover from Sberbank. The new owners of Turkish private lender Denizbank are not likely to delist the bank from the Borsa Istanbul or reduce the already small number of free-float shares, Denizbank general manager Hakan Ates told reporters in the wake of the takeover of the bank by Dubai’s Emirates NBD from Russia’s Sberbank.
Dubai’s biggest bank, Emirates NBD announced on April 3 under a new agreement reached with Sberbank that it will buy Turkey’s fifth largest private bank for Turkish lira (TRY) 15.48bn ($2.75bn), compared to the TRY14.6bn announced in May last year. When the original deal was announced the dollar value was given as $3.2bn, meaning the revised agreement provides a saving of around $400m. The TRY has lost 17% against the dollar since the first deal was signed. The deal is to be closed by the end of
78 TURKEY Country Report May 2019 www.intellinews.com