Türkiye: Weekly Banking Tracker, 20 December 2024

The weekly growth of FX-adjusted credits decelerated from 1% to 0.2%, mainly due to consumer credits in the sector. 4w trend fell down to 0.6%.

Key points

• Key points:
• Deceleration in consumer credits was seen in all of its subsegments and in both public and private banks. Consumer credit card growth was negative due to strong weekly contraction in public banks which brought down the 4w trend rate to below 1%.
• Weekly growth in TL commercial credits fell also in public and private banks due to both SME and non-SME lending, keeping its trend rate at around 0.4%
• FC deposits fell by $1.6bn due to outflows in hholds’ USD and gold deposits, however on mostly price effects. Adjusted from price effects, the decline in FC deposits was $180mn on a weekly basis resulting in an overall decline of $18.2bn year to date ($25.1bn since end March) according to the CBRT. Deposit dollarization ratio fell to 35.2%.
• Yesterday (26/12) the CBRT lowered the policy rate by 250bps to 47.5%, more than the market expectations of 150-200bps cut. They also narrowed down the symmetric interest rate corridor of 150bps from 300bps. Following the start of the rate cutting cycle, we stay cautious at our funding rate expectation of 31% for 2025 year end and also expect the CBRT to maintain credit growth caps especially on consumer loans as long as needed to support normalization in domestic demand.
• The Non-Performing Loans (NPL) ratio of the sector remained at 1.8%.The ratio for commercial credits continued to fall to 1.5% whereas it is increasing for consumer credits to 2.8%. NPL in consumer credit cards reached 3% (compared to 1.3% at the start of the year) and almost 4% in general purpose loans (compared to 2.9% at the start of the year).

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