Turkish banks see lower profit as assets rise

ANKARA - Anadolu Agency

The Turkish banking sector’s net profit in the first nine months of the year decreased by 5 percent to 18.75 billion Turkish Liras ($8.38 billion) year-on-year. 

According to figures released by the Banking Watchdog (BDDK) late Nov. 3, the asset volume of the sector increased by 11.4 percent in 2014 from the year-end in 2013.

The volume of assets reached 1.929 trillion liras ($865 billion) in September 2014, an increase of 197.4 billion liras from the end of 2013, or 11.4 percent.

Loans surged by 13.4 percent in September from the end of 2013, reaching 1.187 billion liras ($532 billion). In January, the BDDK started to impose new measures to restrict private consumption in a bid to ease the current account deficit.

“Turkish banks will face a tough year of weakening asset quality, tighter margins and lower growth … against a background of higher rates, a weaker currency, a slower economy and political uncertainty,” Fitch Ratings said in its latest regular emerging market banking system data watch published in April.

In June, Moody’s made several rating revisions to 11 Turkish banks, citing pressures on their credit strength, a slowdown in real GDP growth and a climate of uncertainty affecting the banks.

Moody’s expects that Turkish banks’ asset quality and profitability will weaken and that liquidity will tighten.