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A total of 11,535 companies benefited from Eximbank’s first-half financing, marking a 12% y/y increase.
Local companies are seeking to increase their exports given the slump in domestic demand seen in Turkey since last year’s lira crisis. Despite the significant depreciation of the lira seen in the currency crunch, Turkey’s export performance has been rather weak because of the unfavourable economic conditions that have emerged in Turkey’s main export markets, such as Germany, which presently risks slipping into recession.
The country’s exports increased by only 2.7% on an annual basis to $98.5bn in the first seven months of the year, according to data from the statistics authority TUIK.
Turkey ‘wants banks to write off billions in loans to energy projects’. Turkey wants its banks to write off loans to some energy projects as part of a larger plan to clear lenders’ books, an effort aimed at boosting credit in the nation’s ailing economy, Bloomberg wrote on September 5.
Banking regulator BDDK has taken the position that credit extended to at least three gas-fired power plants should be classified as non-performing loans (NPLs), according to people with knowledge of the matter cited by the news agency.
The three are reportedly ACWA’s $1bn plant in Kirikkale, Gama’s $900mn project near Ankara and a $1bn facility run by Ansaldo Energia and its partners in Gebze.
Turkiye Garanti Bankasi, Turkiye Is Bankasi, Akbank, European Bank for Reconstruction and Development (EBRD), Denizbank and Yapi Kredi Bankasi are among the banks that lent to those projects, according to data compiled by Bloomberg. The total original loans on these projects were nearly $1.9bn.
The news report also referred to the sources telling how policy makers are working on a broader plan under which the government would push lenders to boost capital to restore buffers and create room for new credit in their balance sheets.
While many analysts say Turkey should put up with lower growth for a period as it restructures its economy, no such plan is likely to wash with the high- growth-oriented Erdogan administration. However, many banks privately told policy makers that they weren’t keen on being forced to reclassify massive amounts of debt as NPLs so quickly, the people quoted in the report said.
Turkish companies have borrowed around $60bn since 2003 to finance investments into new power generation and distribution, according to a Boston Consulting Group report. Since the collapse of the lira in the currency crisis of last summer, some utilities aren’t earning anywhere near enough to repay foreign-currency loans.
About two-thirds of the loans taken out by the energy industry are yet to be repaid, according to Ebru Dildar Edin, a deputy chief executive officer at Garanti. As much as $13bn needs to be restructured with gas plants making up a bulk of it, she said earlier this year.
The Turkish Aeronautical Association (THK) said on September 6 that its Turkish lira (TRY) 1.4bn ($245.4mn) bank debt was to be restructured following instructions from President Recep Tayyip Erdogan.
THK’s debt owed to state lender Vakifbank was restructured on September 6, while the remainder of its debt amounting to TRY1.4bn would be restructured within a week, THK chairman Bertan Nogaylaroglu said on the association’s website.
14 TURKEY Country Report October 2019 www.intellinews.com