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8.1.4 NPLs
Reports suggest Turkish companies have requested that banks restructure at least $30bn of loans.
S&P’s lead Turkey analyst Maxim Rybnikov said in August that the combined level of problem loans, including both NPLs and restructured loans, was expected to rise to about 20% for the system as a whole.
Turkish banks have some Turkish lira (TRY) 296bn ($52.4bn) in “Stage 2 loans”—loans for which the risk of non-payment has increased significantly—on their books a banker briefed Reuters on September 30. Between 15-20% of that total would become non-performing loans (NPLs) under a “worst case scenario,” he reportedly added.
Banking watchdog BDDK informed local lenders they are to delete toughest-to-collect Group 5 NPLs from their balance sheets. This will enable the banks to allocate less provisions and thus write out higher profits but they will at the same time retain their right to collect the non-performing debt in default.
The move against Group 5s makes it even more challenging to track the real situation with NPLs in Turkey. T he official data was already pretty much useless given debt restructurings and the deployed classification methodologies.
The BDDK has raised eyebrows many times in the past. It brought in some changes in capital adequacy ratio calculations after Moody’s Investors Service and Fitch Ratings cut Turkey’s credit ratings to junk following the failed July 2016 coup.
Turkish electricity producer Akenerji—a JV between Czech energy utility CEZ and local conglomerate Akkok Holding—has signed a loan agreement with local lender Yapi Kredi Bank—a JV between Italy’s UniCredit and Turkey’s largest conglomerate Koc Holding—to restructure an $854mn loan obtained in September 2015, Akenerji said on November 11 in a stock exchange filing.
The new financing package has a grace period of 1.5 years and it is denominated in Turkish lira (TRY) and USD, with maturities of five and 13 years.
The restructuring was employed based on a local law introduced in August last
56 TURKEY Country Report December 2019 www.intellinews.com
