Turkish banking industry’s net income rise 23 percent

ANKARA

The combined net profit of Turkish banks amounted to 233.6 billion Turkish Liras in the January-May period, rising 23 percent from a year ago, according to data from the Banking Regulation and Supervision Agency (BDDK).

In May alone, banks posted a net income of 42.93 billion.

Banks’ interest income from loans surged 205 percent in the first five months of 2024, marking a steep 205 percent increase on an annual basis to hit 1.38 trillion liras, with income from consumer loans rising 98 percent year-on-year to 184.7 billion liras.

Interest income from credit cards skyrocketed 470 percent annually over the same period to 122.8 billion liras.

Banks paid 1.38 trillion liras for deposits they collected, which translated into a 268 percent increase compared with January-May last year.

Consequently, banks’ total interest income rose by 68 percent year-on-year to 375.2 billion liras.

Loans extended by lenders, the largest item in assets, grew by 15.8 percent compared with the end of 2023 to stand at 13.52 trillion liras.

Despite the expansion in loans, the share of non-performing loans in total loans declined from 1.75 percent in May last year to 1.52 percent.

Cash loans to the manufacturing sector amounted to 3.1 trillion liras, while loans to the wholesale and retail trade industry stood at 1.6 trillion liras. This was 878 billion liras for the construction sector and 681 billion liras for the transportation, storage and communication industry.

Total assets of the Turkish banking sector stood at 26.97 trillion liras as of May, increasing 14.5 percent compared with the end of 2023, BDDK said.

Local banks expanded their securities portfolio by 11.3 percent over the same period to 4.4 trillion liras.

Deposits, the biggest fund resource of the banks, increased by 4.2 percent from the end of 2023 to 15.92 trillion liras.

Separate data from the banking regulator showed that the FX-protected deposit accounts, known as KKM, continued to decline, falling by 18.3 billion liras weekly to stand at a little more than 2 trillion liras as of June 28.

In January-May, banks’ total shareholders' equity increased by 10.6 percent from the end of 2023 to 2.38 trillion liras, while the capital adequacy ratio was 16.96 percent.

There were a total of 62 banks operating in the Turkish banking sector in May, up from 54 in the same month of 2023.

The number of personnel employed by lenders increased slightly from 206,324 to 209,227, while the number of domestic branches declined from 10,964 to 10,866, BDDK data showed.

Banks expanded their ATM network from 48,810 to more than 50,500.