Collection will be the main subject in 2019

During meetings I held with some financial institutions, I heard speeches lamenting the growing severity of the collection problem in October and November. Interestingly, the gap between funding costs and loan interests is also widening. In other words, the gross return of loans sold is more than in previous periods. Experienced financiers say that returns get higher on paper in such times.

Another interesting development is that those who were strong enough to buy any facility they wanted with their existing fortunes are now in need of the money from those institutions. However, credit institutions do not intend to open a long-term loan for anyone without looking at their cash flow.

Step by step we are heading into the reality of an overly secured credit market. Bankers insist that “the security deposit is not enough; the cash flow must be smooth.” There are many financial institutions that want to sell some of their old loans to asset management companies. Nevertheless, I guess that they will continue to float on the overnight interest rate for a while, even if they are irregular.

Short on adv ce

Most sectors have a credit relationship that “funds the loss.” In other words, those who were complaining that “banks share their profit” can today say that “banks share our loss.” Of course, they don’t say that. I have a little advice: I think it would be appropriate for financial institutions to set up their budgets with the possibility of at least 1.5 percent bad debt. I think that collectables in 2019 will determine the fate of institutions.

Next year’s budgets are likely to be revised several times. In the event that the IMF’s high forecasts for the USD/TRY rate come true, all budgeting will be in the category of “garbage” because the parameters mentioned by the IMF differ widely from the new economy program targets. Meanwhile, cross-border military operations will likely begin. I think our agenda will focus on diplomacy and hot conflicts in the new year.