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
|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||-|
|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%|
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