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for January-March, just above an average forecast of €1.15bn produced by a Reuters poll of analysts. BBVA makes most of its profit overseas, mainly in Mexico, with Turkey its fourth-biggest market. However, with Turkey mired in a recession and burdened by a currency that lost around a third of its value against the dollar last year prior to losing around 10% of its worth against the USD in 2019 to date, the group’s profitability has weakened. BBVA’s Q1 net profit in Turkey, which accounts for about 10% of group earnings, dropped 29% to €142mn, the bank said.
Goldman Sachs in talks with Turkish banks and companies to buy big distressed loans: report. Goldman Sachs is in talks with Turkish banks and companies to buy large distressed loans following a wave of corporate restructurings in the country last year, Reuters on April 24 reported two sources close to the matter as saying. The sources did not specify the size of the restructured loans but said Goldman was looking at those valued in the range of $2bn to $6bn. Turkish banks, suffering the double whammy of a recession and a weak lira, could be interested in selling loans to strengthen their stressed balance sheets and to gain access to liquidity, the sources said. One source said that non-performing loans specialists at Goldman Sachs Group, as well as at certain large London-based banks, were in “intense talks right now” over restructured Turkish loans. “They [Goldman Sachs] are not interested in complicated situations. They are interested in good loans for which the bank could provide a relative hair cut,” a second source with direct knowledge of the matter was cited as saying.
Some of the big corporate loans in Turkey that have been restructured or are being restructured include a $5.5bn loan taken out by Yildiz Holding , which owns Godiva chocolates; a €2bn loan from restaurant group Dogus Holding; and a $4.75bn loan for Turk Telekom’s previous shareholder OTAS. Restructured loans make up more than Turkish lira (TRY) 100bn ($17bn) of the loans in Turkey’s banking sector, which total TRY 2.5 trillion, Finance Ministry data showed. The non-performing loan ratio at banks rose to 4.2 percent in the wake of last year’s crisis and is expected to reach 6 percent by year-end, according to the ministry data.
In March, sources told Reuters that Japan’s Orix and U.S.-based Bain Capital were in talks to buy problematic loans from Turkish banks .
EBRD ‘stands ready’ to increase Turkish bad loans help if asked. The European Bank for Reconstruction and Development (EBRD) stands ready to help Turkey tackle its growing level of unpaid and problem loans in its banking sector if it is requested to do so, one of the development bank’s top officials was quoted as saying on April 4. “The EBRD is interested to deepen its work in the non-performing loan [NPL] space in Turkey,” Arvid Tuerkner, EBRD managing director for Turkey was reported as saying by Reuters, adding: “We haven’t been approached [by Turkish authorities] yet with a proposal to invest in an NPL vehicle/SPV, but would look at it, and are ready to engage, if the structure meets our commercial and sound banking requirements,” Tuerkner added. The EBRD has a 12% stake in Hayat Varlik, a former Lehman Brothers subsidiary and leading NPL purchasing and collection company in Turkey. In January, the development bank provided a TRY100mn loan to Hayat Valik to support the company’s operations and enable Hayat to buy new distressed portfolios from local banks and other financial institutions. The news of its offer helped the lira to a late surge on April 4. It strengthened 0.8 % against the USD. The Turkish stock market index also rallied, by 4.1%, led by banking stocks. Turkey’s dollar-denominated bonds climbed. The 2043 issue added 1.5 cents in the dollar.
Turkey’s Garanti Bank sells TRY365mn NPL portfolio for TRY19mn.
Turkish private lender Garanti Bank has sold a non-performing loan (NPL) portfolio worth TRY 365mn ($61.4mn) for TRY19mn to Sumer Varlik Yonetim, the lender said on April 29 in a stock market filing. The bank's shares were
80 TURKEY Country Report May 2019 www.intellinews.com