bne IntelliNews – Turkey’s bad debt ratio reaches 15.2% at end of January
Problem loans recorded as closely watched in Turkish banks reached 387.5 billion Turkish Liras (TRY) (51 billion TRY) while there is an additional 151.6 billion TRY non-performing loans (NPL), according to Turkish Finance Minister Lutfi Elvan noted on March 16 during a televised maintenance.
The Turkish authorities do not provide actual data series on problem loans, loans taken out under the State Credit Guarantee Fund (KGF) or restructured ready.
Some Borsa Istanbul-listed banks, however, provide figures on the burden of their problem loans.
The guaranteed problem loan ratio (GARAN) extended at 22% at the end of 2020 against 19% at the end of September.
In addition, banks are instructed to keep using the central bank’s average purchase rate of currencies over the past 252 days when calculating their capital adequacy ratios.
Turkish banks are now negotiated below their book value.
Akbank Capital Adequacy Ratio (AKBNK) decreases at 16% at the end of 2020 against 17% at the end of September 2020 and 20% at the end of 2019.
Transparency and reliability of data are the main reasons that make Garanti the most popular Istanbul listed lender among foreign investors.
Observers, for their part, to try, as a rule, to identify the numbers of problem loans in the banking sector in the graph provided by the central bank in its quarterly report on financial stability.
The report does not provide figures on problem loans, but does provide figures for the KGF. As a result, outstanding KGF loans stood at TRY 343 billion at the end of September.
Elvan recently turned to discussing problematic loan data, following his appointment November 10. However, Elvan, widely praised by the markets for being “orthodox” in his economy until it comes to selling emerging market currencies, is, like his predecessor, known for his out-of-the-way rhetoric.
For example, he said in his March 16 interview “for now” referring to the timing of data he provided on problem loans.
According to BDDK data, Turkish banks’ NPLs stood at “TRY 151.6 billion” at the end of January. Thus, taking it as a time reference is useful for comparison.
When the same methodology is applied to the figures as the Minister provided on December 10, during his budget speech in parliament, we have the possibility of concluding that the overall ratio of problem loans rose to 15.2% at the end of January against 15% at the end of September.
On March 16, Elvan also provided some ratios for the numbers he relayed, but they were somewhat “approximate.” It is not possible to locate them along the timeline. BloombergHT did not include the ratios in its history, instead of just taking the numbers to read it.
In an article published on the official website of the Ministry of Finance, it was written that the interview took place on March 12.
In Turkey, there is no shortage of mustached jacklegs and pawn shops that provide the world’s highest cost FX financing. Their prevalence also serves as a useful measure of the country’s economic quagmire.