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7.0 Financial & capital markets 7.1 Bank sector overview
7.1.1 Earnings
The combined net profit of Turkish banks increased by 22.4% in 2020 to Turkish lira (TRY) 59.97bn.
Generous allowances made in “regulatory forbearance” should be taken account of. Turkey’s banks face mounting difficulties with problem loans.
Assets of the local banking industry grew 36% from 2019 to stand at TRY1.6trn while deposits rose nearly 35% to TRY3.5trn.
Loan volume climbed by 35% to reach TRY3.6trn. The non-performing loans (NPLs) ratio was 4.07%, down from the previous year’s 5.36%.
The capital adequacy ratio in the Turkish banking sector improved slightly to 18.76% last year from 18.4% in 2019.
Lenders are allowed to distribute 10% of their profits in 2020. The payment of dividends was not allowed in 2018 or 2019.
There are 51 lenders including deposit banks, participation banks and development and investment banks in Turkey.
Ortalama ozkaynak karliligi: Average return on equity, Ortalama DIBS faizi: Average interest on domestic government bonds (risk-free benchmark), ISO-500: Istanbul Chamber of Industry’s (ISO’s) list of the top 500 industrial companies.
“At what cost does the state borrow [with domestic government bond rates]? At 13-14%. How much does it earn when it invests its money in me [state-owned Ziraat Bank]?... “The domestic government bonds [risk-free benchmark] offers 11%, while banks offer a 11% return [for shareholders]. Why does the man invest in me [Ziraat Bank]? Why would he take on the risk? Why would he deal with tonnes of audit?... A boss who earns a 10% return would not invest in a bank but in a shopping mall,” the banking association head Aydin said.
Turkish Banks at end-September
1
2
3
million Turkish lira
Ziraat
Halkbank (HALKB)
Vakifbank (VAKBN)
since
1863
1938
1954
Assets
923,689
663,675
638,070
Loans
603,518
453,924
427,133
Deposits
644,667
440,615
394,206
Equity
84,678
41,674
44,186
Paid-in
13,100
2,474
3,906
Profit(9m/20)
6,089
2,090
4,341
Off-Balance
2,908,707
2,270,223
7,813,920
Branch
1,758
1,011
938
25 TURKEY Country Report March 2021 www.intellinews.com