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Turkish Bank Group Aims to Strenghten Capital of State Banks

Turkish Bank Group Says Lenders Should Fund New Model: Report

The Banks Association of Turkey is working on how to strengthen state bank capital in order to help boost loans as President Recep Tayyip Erdogan presses for looser monetary policy to spur growth and create jobs, according to Alpaslan Cakar, the head of the association.

The Turkish banking industry is “strong and solid” in terms of capital adequacy and non-performing loans ratio, the association’s head Alpaslan Cakar said in an interview with a local TV channel. 

He said lenders will “take responsibility in some way” to support Erdogan’s economic model, which relies on banks giving out loans that will eventually transform into investments and employment. 

Banks need to “finance the new economic model,” Cakar said. “We will all contribute in proportion to our scale, we can not grow independently from the economy.”

Total profit at Turkish banks in the January-October period rose to 66.1 billion liras ($4.8 billion) from 50 billion liras in the same period a year earlier. The average non-performing loan ratio was 3.5% in October, down from 3.97% the previous year, while the average standard capital adequacy ratio was about 17%.

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