Turkish Banks Suspend Loan Payments to Ease Virus Fallout
(Bloomberg) -- Turkish banks on Monday offered customers some relief from debt repayments and pledged more cash, the latest steps in the campaign to limit the economic fallout from the coronavirus outbreak.
State lenders including Ziraat Bank, Halkbank and Vakifbank allowed clients to postpone repaying debt by three months. Banks also pledged to restructure existing loans to give companies grace periods of as long as 12 months when they aren’t required to make any payments.
The measures are part of a government-backed campaign to extend financial assistance to companies to prevent them from cutting jobs.
Turkey has shut down tens of thousands of businesses to slow the spread of the virus as deaths rose to 37 and the number of infected patients climbed to 1,529, according to the latest data on Monday.
Isbank, Turkey’s largest private lender by assets, Akbank and Yapi Kredi also allowed clients to postpone loan repayments until June 30. At least seven banks pledged to boost credit limits to companies in need to prevent them from laying people off.
Last week, President Recep Tayyip Erdogan unveiled a 100 billion lira ($15.2 billion) package of tax cuts, payment deferrals for businesses and pension increases.
Opposition parties criticized the stimulus package as being too small and ineffective. The plan “fell so short of expectations” and failed to lend a hand to workers, farmers and shopkeepers, said a spokesman for the main opposition party CHP, Faik Oztrak.
Former Prime Minister Ahmet Davutoglu’s “Future Party” urged the government to sell 100 billion liras of inflation-linked “Corona Bonds” with zero real interest to help fragile sectors, farmers and the unemployed.
Turkey has imported medicine and fast diagnosis kits from China and stopped exporting face masks, Health Minister Fahrettin Koca said Monday. The government threatened to seize the factories of face mask producers if they didn’t start selling their inventories to the government by 8 p.m. on Monday. Koca also said Turkey would produce at least 2,000 ventilators by the end of April.
Below are some of the recent measures announced by authorities and Turkish companies:
- Banking regulator eased capital adequacy ratio and net FX position calculation rules for banks
- Turkey has temporarily shut down more than 165,000 businesses and placed at least 10,750 people under quarantine, including some ambassadors and state officials of foreign countries
- Some civil servants, staff at brokerages told to work from home
- Turkish Airlines will start a buyback program once shareholders approve it at a general assembly meeting scheduled for March 31. Turkey’s flagship carrier will halt most international flights from March 27 until April 17.
- Otokar, Turk Traktor ve Ziraat Makineleri AS suspended production for 14 days at its two plants, in part due to disruptions in the supply chain
- Three textile companies -- Menderes Tekstil Sanayi ve Ticaret AS, Rodrigo Tekstil Sanayi ve Ticaret AS and Soktas Tekstil Sanayi ve Ticaret AS -- halted production from Monday
- Police and local officials started to help with deliveries of food and medicine to people over 65 and those with chronic diseases who have been asked to stay at home except for emergencies
- The government announced the temporary closure of Istanbul’s Grand Bazaar, one of the world’s oldest covered markets
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