Banking raises its Q2 profit 33 percent
Posted by meb at September 17th, 2009
Turkish banking industry proves to be a high-profit business as its profit rises 33 percent to 11 billion Turkish Liras in the second quarter of the year. Although the banking industry has been displaying a great performance despite the global economic crisis, however the rising number of non-performing credits may be perceived alarming
The Turkish banking sector has increased its net profit by 33 percent in the second quarter of this year compared to the same period last year, official figures revealed.
The sector raised its net profit to 11 billion Turkish Liras, according to the quarterly Financial Markets Report prepared by the Banking Regulation and Supervision Agency, or BRSA.
The sector’s deposit, participation and loan credit customers increased in the second quarter of the year. The proportion of non-performing credit card customers to total credit card customers reached 8 percent over the period, according to the report.
As of June, the banking sector’s total assets reached 768 billion liras. The contraction in domestic demand and the expectations souring with the global turmoil are expected to have slowed down the growth pace of loans, which constitute the largest element among total assets.
The sector’s total loans rose 7.4 percent in June over the corresponding period last year, to 368 billion liras. In line with the slow down of loans, the banks’ tendency to increase their placements in securities has continued. Deposits, which constitute the sector’s most important foreign resource, reached 468 billion liras.
The sector maintains its robust equity capital structure. In June, its aggregate equity capital reached 98 billion liras. In the first half of the year, the sector’s equity capital was 18 percent and its return on assets 2.2 percent.
Personal loans up in June
The BRSA report has revealed that personal loans rose as of June following a downtrend. The recent deterioration in interest rates has affected personal loans positively.
Compared to the previous quarter, consumer loans climbed 3.7 percent and credit cards 6 percent. The credit groups apart from personal loans generally dropped.
The Turkish banking sector’s capital adequacy ratio, which was 18.5 percent in March, rose to 19.2 percent in June. The banking sector’s overall profit surged 32.6 percent in June over a year earlier.
The increase in net interest revenues is reported to have played a role in the sector’s maintaining its high profitability. In the second quarter of the year, the rise in personal loans enabled a 29.7 percent rise in loan fees and commissions compared to the same period of last year. The sector’s equity grew 8 percent over a year earlier.
The banking sector’s overdue receivables rose by 9.6 percent to 18.8 billion liras in the second quarter of the year compared to the first quarter.
The global economic climate started to signal slow rally as of the second quarter of the year, according to the report. This year’s second quarter constitutes a significant period for normalization in financial markets, the report said.
Despite these positive developments, it is still important to keep the measures and the international commitment against the global crisis, it said, adding that possible languish in these fields are among the top risk factors.
The stagnation in the global economy affects Turkey’s foreign demand. The lack of efficiency in loan channels as well as the loan risk stemming from real sector and households’ indebtedness are still risk factors, according to the report.
It also noted that the measures encouraging the production and consumption contributed into the recovery of economic climate and confidence as of the second quarter of the year.
There are signals for better growth rates in the second quarter compared to the first quarter of the year, according to the report, which also stresses that the weak foreign and domestic demand has reduced inflation risk.
source: Hurriyet daily news
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