Turkey’s banking sector capable of managing risks: Bank association
ISTANBUL
Turkey’s banking sector remains strong enough to manage risks and maintain its positive outlook, the Banks Association of Turkey (TBB) stated on May 16.
“The banking sector has the necessary structure and strength that would support sustaining economic growth healthily. It is fully compliant with international regulation and supervision measures,” the TBB said in a statement.
The TBB said the sector has good international basic indicators, such as regulatory capital, to risk weighted assets ratio, assets quality, good quality guarantee structure, liquidity and profitability level, and management experiences.
It noted that the banking sector’s regulatory capital to risk weighted assets ratio, a significant indicator to figure out minimum capital requirements of lenders, was at 16.6 percent in the first quarter of 2018.
The ratio of non-performing loans to total cash loans, another crucial indicator, was lower compared to other countries, standing at 2.90 percent as of March this year, it said.
The TBB’s comments came after a report from credit rating agency Moody’s on May 15 saying that the outlook for the Turkish banking system is negative due to downside risks related to funding and asset quality.
The operating environment for Turkish banks will also remain challenging due to a combination of factors including slowing economic growth, ineffective monetary policy, currency depreciation and high unemployment, Moody’s said.
