Turkish banking association sees sector’s profit flat this year

ISTANBUL - Reuters

The Turkish Banking Association foresees banks’ profit to be flat in 2014.

The Turkish Banking Association expects profits in the banking sector this year to be at around the same levels as last year, General Secretary Ekrem Keskin told reporters on Aug. 19.

Turkey’s banks had a total net profit of 24.73 billion Turkish Liras ($11.42 billion) at the end of 2013, up 5.1 percent on the previous year.

However, the sector’s net profit fell 8.4 percent year-on-year to 12.5 billion liras in the first half of this year, the banking watchdog BDDK said Aug. 8.

Credit growth is expected at 18 to 22 percent in the second half, Keskin said, adding that he expected asset growth of 15 to 20 percent in the six-month period.

Turkish lenders are still feeling the pressure from the tough conditions in the sector, in spite of eye-catching progress from the ailing first quarter, second-quarter figures revealed over the past few weeks revealed.

While the Central Bank’s massive hike greatly reduced the high demand for loans, the banking watchdog’s regulations curbed the demand for credit card usage and borrowing loans by restricting installment payments on several goods and lifting loan amounts with the aim of reducing domestic spending that led to a rise in imports.