Page 35 - TURKRptOct20
P. 35
6.1.2 NPLs
The underlying asset quality of Turkish banks will weaken due to the coronavirus (COVID-19) pandemic but this will be more apparent in their income statements than in their reported asset quality metrics in 2020, Fitch Ratings said on September 9.
Turkish companies are reportedly seeking more time to repay bank loans after the coronavirus (COVID-19) pandemic upended plans to sell assets.
Even before the virus hit Turkey in early March, firms were seeking lower rates from banks after an aggressive monetary easing campaign.
Since then, large and small companies have been looking for further revisions to nearly all of the restructurings agreed in the past two years, said one of four sources whom Reuters spoke to in outlining the debt situation with its September 15 report.
Conglomerate Dogus was among the companies preparing for talks, the source was cited as saying.
In response to a query from the news agency, Dogus said: “Our regular and usual negotiations with banks are, as always, under way within the framework of good relations.”
Other restructuring talks involving major companies were already happening, the source said.
Businesses in Turkey, like counterparts around the world, have been severely impacted by lockdowns to try and stop the spread of the virus.
Turkish companies, however, were already undermined by the 2018 Turkish lira crisis. Some, including Dogus, Yildiz and several energy firms signed billions of dollars worth of restructuring deals.
Asset sales were a key part of some of those restructuring agreements
but the impact of the coronavirus crisis has deterred some would-be buyers, the sources were quoted as saying.
Turkish conglomerate and food giant Yildiz Holding in August announced a revision. It said it paid off $600mn for its syndication credit and extended the maturity to 2030.
In February, Reuters reported some conglomerates, including Dogus and Yildiz, were in talks for cheaper loans after the central bank cut rates from 24% in mid-2019. The policy rate is now 8.25% but hikes could be in store given high inflation and a record low lira.
Turkish electricity producer Enerjisa Uretim, a 50-50 JV between Turkey’s second largest industrial group Sabanci Holding and Germany’s E.ON, has obtained a €650mn loan from Akbank, Garanti BBVA, HSBC Turkey, Isbank and French lender BNP Paribas’ local unit TEB, the company said on September 21.
Akbank is controlled by Sabanci.
6.1.3 NIMs & CARs
35 TURKEY Country Report October 2020 www.intellinews.com
Foreign bank exposure to Turkey has fallen since the August 2018 lira crisis, but oversea lenders still had a total of $166bn of claims on Turkey at the end
