Page 15 - TURKRptOct19

“We have quickly reached a deal and signed an agreement with Vakifbank, our largest creditor, for the debt restructuring,” Nogaylaroglu said in the statement.
THK’s tax and social security debt would also be restructured as soon as possible, he added.
Turkey’s banking association expects $10bn of electric utility loan restructuring this year. Turkey’s electric utilities are carrying debt amounting to $47bn of which $12-13bn requires restructuring, Turkey’s banking association TBB said on September 10.
TBB added that it expected $10bn of the restructuring to be completed by the end of this year.
Turkey’s Eximbank, Isbank cut rates following central bank’s 325 bp of easing. Turkey’s Eximbank said on September 13 it has cut interest rates for lira loans extended to companies.
Its move came the day after the central bank cut its key policy rate by 325 bp this week, following up on the 425 bp decrease it introduced in August.
Eximbank said the interest rates on loans provided to export-geared small and medium sized enterprises would be redueced by around 1 percentage point. Interest rates on loans extended as part of a state-backed package would be cut by around 2 pp, it added.
Also on September 13, Turkey’s Isbank reduced interest rates for housing loans.
The lender said it would apply a 1.17% monthly interest rate on house loans with a maturity of up to 120 months.
Turkey’s banking watchdog BDDK on September 17 instructed banks to write off Turkish lira (TRY) 46bn ($8.1bn) of loans by year end and set aside loss reserves.
The regulation is directed mostly at loans made to the shaken energy and construction sectors, once debt-fuelled darlings of the country’s boom years. It is anticipated that it will widen lenders’ non-performing loan (NPL) ratio to 6.3% from 4.6%, the BDDK said.
Moves led mostly by banks to clean up some $20bn in bad debt have failed to make the hoped for progress in recent months. Initial plans have been rejected or shelved. A person familiar with the Treasury’s plans was quoted by Reuters as saying on September 18 that the government has grown impatient with the lack of progress on bad debt, clogged credit channels and an unwillingness by banks to write off loans. It planned to take a more aggressive stance on the matter, the person added.
The BDDK said Turkish banks’ capital adequacy ratio (CAR) would slip by 50 bp to a still high 17.7%. That would be due in part to the instruction on NPLs, according to what the regulator described as a “prudent” analysis based on July data.
In a statement, the watchdog added that lenders have raised cash over the last year, with core and secondary capital rising by TRY49bn.
“Studies conducted show that the industry as a whole maintains its healthy and strong structure and the standing capital structure is at a level that can easily manage asset quality-based risks,” it said.
The BDDK previously estimated that the banking sector’s NPL ratio could rise to 6% by the end of 2019, Some analysts have calculated higher estimates.
15 TURKEY Country Report October 2019 www.intellinews.com