Bank forecasts for 2018 and the possible consequences

As the 2018 budgets for big banks have been determined, forecasts regarding their macro goals and credit-deposit relations are surfacing. Actually, we can say these forecasts apply to all companies working on big budgets.

While İşbank has predicted a 4.1-percent growth for 2018, it has predicted the inflation rate as 10.2. Garanti Bank, however, has predicted a 4.5-percent growth rate for 2018. Garanti Bank’s USD exchange prediction is 4.14 Turkish Liras.

Banks take their budget works as a basis when predicting the forecasts.

So, we can see that the private banking sector predicts the growth to be around 4-4.5 percent, this year’s inflation rate as 10 percent and the exchange rate to be around 20 percent. When we look at big real sector firms, we see they have similar predictions.

Let us also remember that while these numbers are quite different from official predictions, as the private sector prepares for the year based on their predictions and studies, the possibility of private sector predictions coming to life is higher.

İşbank predicts a 12-13 percent deposit growth for the sector and a 13-14 percent credit growth.

Garanti Bank, however, foresees a 10-percent active growth and a 14-15 percent credit growth. It predicts a horizontal growth for foreign capital credit growth. Garanti also predicts an 11-percent mortgage loan growth, four-percent need-based credit growth, 13-percent growth for credit cards, a 15-percent growth for Turkish Lira deposits and a five-percent growth for foreign capital deposits.

Interest rate raise is inevitable

Some analysts say the growth rate could rise above these numbers, as firms have not taken continuing credit guarantee funds (KGF) into consideration. Meanwhile, there are bankers who find these credit and deposit growth predictions as optimistic 

Based on these predictions, we can say the banks are predicting a continuing acceleration rate for bank deposits and credits, although slower than it was in 2017.

Looking at these numbers, again, it is obvious there is a need to discuss how such a high growth rate could be realized, as using foreign capital will be tougher than it had been in 2017. In this regard, it would not be wrong to say banks will keep their interest rates at a high level and go above the current interest rate, looking at their credit-deposit goals.

Again, we should remember this year’s raising interest rate predictions, looking at how 150 percent of the collected deposit was loaned and that maintaining the foreign capital that supplements this deficit in 2018 will likely be tougher than it had been 2017.

We should also mention that all these calculations had been made without taking the threats against the Turkish economy seriously. Bankers also know these predictions will not mean much if Turkey is subjected to serious penalties and financial responsibilities. But, naturally, they make their calculations avoiding such possible risks.

We should remember that if these risks are realized, not only will the numbers provided by the banks be impacted negatively, but so will the inflation, deposit and growth rate predictions.

That is why I do not think it would be wrong to say that banks and the private sector have started off with optimistic predictions for the year ahead.