Turkish Banks Recorded High Net Profits in Q2 2009

 

With a net profit of 33% in the second quarter of 2009 against the corresponding period a year ago (2008), the Turkish banking industry is turning into a highly lucrative business, said the Banking Regulation and Supervision Agency, as reported by Hurriyet Daily News. The industry’s net profit pegged at 11 Billion Turkish Liras.

 

The industry made decent progress in segments of deposit, participation and loan credit customers in the second quarter of 2009. Moreover, the non-performing credit card customers accounted for 8% of the total credit card customers in the same period.

 

At the end of June 2009, the total assets of banking industry jumped to 768 Billion Liras and the equity capital structure remained substantially strong. In fact, the aggregate equity capital market stood at 98 Billion Liras in June 2009. In the first half of 2009, the banking industry equity capital market pegged at 18% while returns on assets at 2.2%.

 

The stupendous growth in the Turkish banking industry is led by cross-border transactions and strong economic growth. Rising consumer demand for credit has also given a new direction to the overall industry.

 

Moreover, banks have changed their policies of investments as they are withdrawing money from government securities and pumping it into the loan segment in view of falling interest rates that have intensified competition in housing and consumer banking.

 

RNCOS, a leading market research firm, has also said in its research report “Turkey Banking Sector Forecast to 2012” that Turkish banks will continue to prosper without changing their risk profiles because high prospective growth for the overall banking industry and favorable profitability dynamics keep rolling activities.

 

The banking industry is expected to continue its growth even in tough economic times and banks will keep embarking on their expansion plans, said the report.

 

According to a Research Analyst at RNCOS, “Although the banking industry has seen some positive developments, it would be wrong to say the financial crisis has no impact on it because banks have seen bad loan problems. There was a serious liquidity problem eight and ten months back. Thus, it becomes inevitable to closely monitor investment by central bank and industry, and banks credit disbursal rate to maintain strong growth fundamentals.”