Türkiye | Weekly Banking Tracker. September 20, 2024

The weekly growth of FX-adjusted credits decelerated in the third week of September from 0.6% to 0.3% due to strong contraction in consumer credits in the overall sector.

Key points

• Key points:
• TL commercial credits’ weekly growth continued to increase with public banks’ both SME and non-SME lending. After the strong growth of the previous week, a weekly contraction was seen in consumer credits due to both public and private banks, but mainly led by public banks’ general purpose loans.
• The 4-week average trend in consumer credits implies a deceleration in consumer credits which we expect to continue due to the monetary tightening and the recent CBRT decision on differentiating the maximum interest rates applied to credit cards based on their limits as means of tightening consumption.
• The fall in FC protected scheme (in US dollar terms) was high last week with $1.12bn declining to USD 45.4bn The share of TL deposits excluding FC protected scheme in total deposits fell to 53.4% from 53.5% previously (vs. the CBRT’s target of 50% in 2024).
• The Non-Performing Loans (NPL) ratio of the sector hovers around 1.73%. Today’s BRSA decision on the availability of restructuring consumer credit card debts up to 5 years will decelerate the NPL inflows in this segment.
• Last week’s decision on revising the risk weights for consumer loans will have a positive impact on banks’ capital adequacy ratios by around 100bps. Overall, these steps together with the revised RR ratios for both TL and FX deposits and the revised commission rates will contribute positively to banks’ profitability in the coming months.

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