‘Turkish banks cannot be defeated’
Despite persistent vulnerabilities in the economy, Banking Regulation and Supervision Agency (BDDK) President, Mehmet Ali Akben, believes that banking has proven itself the most resilient of Turkey’s sectors. Speaking to Daily DUNYA, he argued that the facts and figures don’t lie. “If a SWOT analysis is done for Turkey, the banking sector would take first place as the most powerful part of our country,” Akben said.
Looking at the figures, Akben said that the NPL rate, which is one of the most important indicators of asset quality, is at its lowest level at 2.89 percent. “In addition, the capital adequacy ratio is 16.7 percent, well above the legal limit and the target ratio,” he said. “Return on equity was 14.5 percent in February 2018. Another factor that makes us stand out in terms of risk compared to other countries is the low leverage ratio.”
‘Inst tut ons do not have payment d ff cult es’
Akben also noted that credit availability in the real sector continues to be strong. “As of the end of March 2018, the currency and parity adjusted total loan growth rate was 19.3 percent,” he said. “This growth is mainly due to commercial loans, which was 21.3 percent, while the growth of individual loans was 13.6 percent. On the deposits side, the currency and parity adjusted growth rate was 17.1 percent. Therefore, the sector maintains its healthy structure with strong growth rates.”
Akben underlined that the non-performing loan rate for the Credit Guarantee Fund is below one percent. Debt payment habits of institutions is in very good condition, he added. “They say there is a problem in housing and construction,” he added.
“However, the NPL rate in home loans is only 0.41 percent. For vehicle loans it is 2.80 percent and 4.67 percent on consumer loans. At the moment, the highest rate is 6.5 percent on credit cards. The problem with housing is the stagnation in sales. Interest rates are high, but housing prices are down. When the market improves, these interest rates will come down and then house prices will rise. Today, average interest rates in housing loans are 15 percent.”