Turkish banking industry sound, says finance minister

ISTANBUL

The latest data released by the Banking Regulation and Supervision Agency (BDDK) confirmed that the Turkish banking industry, with its high profitability, high asset quality and sound capital structure, has “a healthy outlook,” Treasury and Finance Minister Nureddin Nebati has said.

Nebati noted that the banking industry’s capital adequacy ratio at 17.1 percent as of February was well above the target of 12 percent and the legal upper limit of 8 percent.

“High capital adequacy provides a necessary buffer for our banking industry against possible risks,” Nebati wrote on Twitter on April 2.

The share of non-performing loans to total loans was only 1.9 percent, which underlined the banking industry’s sound asset quality, the minister furthered.

“It should be recalled that our banking sector has managed to achieve all this healthy outlook under the difficult conditions in the financial system, which are the result of the tight monetary policies implemented in the global markets recently.”

The integrated structure of the Turkish banking sector with the global financial markets, qualified human resources and pioneering technological applications have brought Türkiye further into the fore in this field, Nebati added.

“Despite the current global challenges, our country, with the support from the healthy development of the banking industry, continues to move forward with firm and resolved steps toward the target of the Century of Türkiye,” Nebati said.

The data from the BDDK showed that the total assets of local banks grew by 4.8 percent from the end of 2022 to stand at 15 trillion Turkish Liras as of February, while loans increased by 6.3 percent over the same period to more than 8 trillion liras. The industry’s securities portfolio rose by 6.6 percent to 2.5 trillion liras.

The combined profit of Turkish banks amounted to 65.6 billion liras in January-February, up from the net profit of 39 billion liras in the same period of 2022.

There were 54 banks operating in Turkiye as of end-February, with nearly 11,000 branches and more than 208,000 employees.