Turkish banks’ profits decline in January, show data

ANKARA

The combined net profit of Turkish banks declined by 19 percent in January from a year ago to 32 billion Turkish Liras ($1 billion), according to the data from the Banking Regulation and Supervision Agency (BDDK).

In January last year, lender’s net income was 39.3 billion.

The banking sector posted a net profit of 603.6 billion liras last year, marking a 39.8 percent increase from 2022.

The total assets of the banking industry increased by 1.5 percent from the end of 2023 to stand at 23.9 trillion, the watchdog said.

The banks’ securities portfolio grew nearly 4 percent over the same period to reach around 4.1 trillion liras.

Loans extended by Turkish lenders exhibited an increase of 2.2 percent compared to the end of 2023 climb to 11.94 trillion liras as of January.

Interests the banks collected from loans soared 181 percent to 246 billion liras, with interests from consumer loans rising 86 percent. Interest income from credit cards grew at a staggering rate of 529 percent to 22.8 billion liras.

However, the interest banks paid for deposits leaped 329 percent from a year ago to touch 261 billion liras.

Consequently, the banks’ net interest revenues inched up 3 percent last month from January 2023.

The share of non-performing loans (NPL) in total loans was only 1.6 percent, improving from the NPL ratio of 2.1 percent in the previous year.

Deposits, the biggest fund resource of the banks, inched up 0.6 percent annually to 14.95 trillion liras.

The capital adequacy standard ratio in the industry was 18.9 percent.

The number of banks in Türkiye increased from 54 in 2022 to 61, which nearly had 10,877 branches and some 208,400 employees.

The lenders had 10,967 branches and 207,667 employees in January last year.

 Steep rise in credit card spending

Separate data from the Interbank Card Center (BKM), credit card spending soared 126 percent year-on-year to 810.9 billion liras in January.

The number of credit cards in the country reached 119 million, pointing to a 17 percent increase from the same month of last year.

Debit card spending grew 78 percent to 141 billion, while the number of those cards rose 11 percent to 191 million.

Payments with prepaid cards showed a 124 percent increase last month from a year ago to 18.1 billion liras.

Total card spending, including credit, debit and prepaid cards, rose 118 percent in January compared to the same month of last year to 970 billion liras.

The number of transactions with those cards increased 20 percent to a total of 1.4 billion, BKM said.

Central Bank Governor Fatih Karahan said earlier this month that the authorities are closely watching the spike in credit card spending and that they were working on this.

Karahan, however, did not provide other details as to what kind of steps could be taken on credit cards.

Karahan’s comments led to speculations that authorities may introduce some restrictions.