Rising liquidity costs caused by the implicit rate hikes of the Turkish central bank pushed the average cost of 3-month deposits for Turkey's banks to 11.30% while the average mortgage rate declined to 11.11%, Bloomberg reported on April 5.
Flying in the face of economic orthodoxy, Erdogan - who is into the last two weeks of campaigning for the April 16 referendum that critics say could turn him into a strongman president - is continuing to insist that lowering interest rates would result in lower inflation, as well as stronger economic growth. A more logical explanation for Erdogan’s intense fight against interest rates could be the Turkish economy’s dependence on the construction industry and as a result on housing demand.
The average interest rate for cash loans stood at 16.66%, for commercial loans at 15.51% and for vehicle loans for 15.42%, according to Bloomberg.
Private lenders slightly hiked their mortgage rates recently and the state-owned lenders are currently taking losses to finance the struggling construction industry, the news agency also reported.
|
Turkish Banking Industry |
|||
| end-2016 | end-Jan | m/m | |
| Loans (TRY mn) | 1,734,342 | 1,804,199 | 4.03% |
| Deposits (TRY mn) | 1,453,660 | 1,499,811 | 3.17% |
| Gross NPL / Total Loans | 3.35% | 3.30% | -0.05 |
| Bank Capital to Assets | 10.99% | 10.76% | -0.23 |
| Capital Adequacy Ratio | 15.57 | 15.15 | - |
| ROA | 1.37% | 0.13% | -1.25 |
| ROE | 12.50% | 1.20% | -11.30 |
| Assets (TRY mn) | 2,730,942 | 2,866,413 | 4.96% |
| Gross NPL (TRY mn) | 58,071 | 59,512 | 2.48% |
| Net profit (TRY mn) | 37,532 | 3,697 | - |
| Net Interest Income (TRY mn) | 91,343 | 9,073 | - |
| Total Shareholders' Equity (TRY mn) | 300,172 | 308,437 | 2.75% |
| source: bddk | |||
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