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There were 51 banks—state-owned, private, Islamic finance, development and investment lenders—operating in the country as of end-May.
The banking industry cut its workforce to 203,000 from 205,000 a year ago while the number of local branches declined to 11,200 from 11,300. The number of ATMs increased to 49,400 from 48,700.
8.1.2 Loans
Capital Economics: “Turkey’s credit boom that started towards the end of last year has been turbocharged in recent months and this should provide some welcome support to the economy as it emerges from the coronavirus crisis. That said, the nature of the lending reinforces our concerns regarding another credit-fuelled consumption binge, the growing influence of state banks and the outlook for the public finances.”
Taking bank credits available with subsidised costs to buy physical gold has become a “new fashion” in Turkey, BloombergHT reported on July 16.
Turks see investment opportunities as narrowed due to prevailing negative real bank deposit rates and exchange rate uncertainties. And they see gold as safe harbour, according to the publication.
“The decline in consumer loan rates has also inclined citizens to gold,” Akif Turker, a goldsmith at the Grand Bazaar in Istanbul, was cited as saying.
The bazaar has historically been the leading jewellery store hotspot in Turkey.
“Citizens started buying gold when prices stood at Turkish lira [TRY] 300,000 per kg and now prices reached TRY400,000/kg,” he added.
Citizens first come along to ask about the prices and then take cash advances with instalments via their credit cards to buy physical gold for investment, Ali Vurmaz, another goldsmith at the Grand Bazaar, told the publication.
One shopper at the bazaar reportedly said that he had taken a cash advance with instalments with his credit card twice.
The first time, he bought quarter gold coins with a TRY10,000 advance available for 12 monthly instalments. He will repay TRY12,800 to the bank.
On the second occasion, he took a cash advance of TRY7,000 after the value of his gold rose to TRY14,300.
48 TURKEY Country Report August 2020 www.intellinews.com
