NEWS Finance        10/12/2020

Turkish finance minister provides parliament with details of problem loans

Treasury and Finance Minister Lütfi Elvan, in a speech he made today at the Turkish parliament, announced that there were TL 382 billion in loans in the banking sector under observation, and TL 151 billion of non-performing loans, making a total of TL 533 billion problem loans.


Elvan added that Turkish banks had provided for TL 113 billion against the TL 151 billion in non-performing loans, a rate of 75% which compares with the rate of 45% for Europe as a whole. With regards the TL 382 billion loans under observation, he said that there were TL 58 billion in provisions, which represented 15% compared with the standard rate of 6% in Europe.


Elvan claimed that Turkish banks were strong and healthy, and were very closely controlled by the Turkish banking watchdog, the Banking Regulation and Supervision Agency (BDDK).


Elvan reminded parliament that because of the coronavirus pandemic, the number of days before which overdue loans were classified as non-performing had been increased from 90 days to 180 days, and that this period had been extended to June. He said that these precautions were very conservative when compared to other industrialised countries.


Elvan stated that there was no open foreign currency position in the banking sector, indeed there was a surplus of USD 3.3 billion. He added that the three state banks had however an open position of USD 2.7 billion, and that an open position must not surpass 20% of total capital. The rates for the three banks were 9%, 10% and 12%. With regards the private sector banks, the total surplus was over USD 6 billion. Elvan emphasized that the decisions made by BDDK were very rational and had a positive effect on the market.

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