Turkish Banks Braced for Surge in Cash Demands, Garanti CEO Says

(Bloomberg) --

Turkish banks have more than enough liquidity to help cash-strapped companies cope with the fallout from the novel coronavirus when their needs become more urgent starting from April.

“There is no reason to panic,” Recep Bastug, chief executive officer of Turkiye Garanti Bankasi AS, said on a conference call Tuesday. “The lenders in Turkey have sufficient liquidity to overcome the demand from companies.”

The Istanbul-based unit of Spain’s Banco Bilbao Vizcaya Argentaria SA expects that businesses will have “serious” cash-flow requirements starting next month, he said. Companies in various industries will need the money to support the flow of goods from their suppliers and to cover their liabilities, Bastug said.

Turkey’s state-owned lenders are leading an effort by the government to turn on the credit taps so the economy can weather the storm caused by the outbreak. On Monday, the government doubled the allotment for a fund that guarantees business loans following a series of other measures by the banking regulator and the central bank to ease access to finance and ensure the market has enough liquidity.

Read more: Turkey Doubles Government Guarantees on Loans to Spur Credi

The industry is not experiencing a dash by customers to withdraw their deposits, the Garanti CEO said.

Demand for consumer loans has decreased more than 50%, Bastug said, as people started staying home this month due to the virus outbreak. Credit card spending also has come down more than 30%, he said.

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