BANKING SECTOR IN TURKEY CENTRAL BANK OF TURKEY

Transcription

1 BANKING SECTOR IN TURKEY CENTRAL BANK OF TURKEY April 27

2 Structure of the Financial Sector Size of the Financial Sector * 88,1 Banking sector continued to grow and its total asset size reached 567 billion 3,9 3,2 1,7 1,,6,5,4,5,1 YTL (41 billion USD) as of 26. Banks (incl.participation banks) Mutual funds Insurance companies Leasing companies Factoring companies Consumer finance companies Securities brokerage firms Real estate investment companies Pension funds Investment companies % (*) As of December 26, except for Securities Brokerage Firms, data of which is as of September 26.

3 Asset Size of the Banking Sector mio YTL % Source: BRSA-CBRT. Total assets in real terms Total assets/gdp (right axis) Turkish banking sector s asset size has considerably grown although it is still under EU average. Development of Asset Size % Italy Greece Finland Czech Republic Turkey (B) Hungary Turkey (A) Poland Banking Assets / GDP: Comparison to EU Countries Portugal Spain Sweden Belgium Denmark EU15 Netherlands Germany France Austria UK Ireland Turkey (A) shows the data of 25; Turkey (B) shows the data of 26. For EU members, the data of 25 is used. Source: Turkstat, BRSA-CBRT, ECB Report, 26.

4 Ownership Composition of the Banking Sector Distribution of Turkish Banking Sector Assets According to Equity Ownership % 16, 2,1 18,5 4,3 12,4 22,4 41,4 36,5 3, Due to the foreign investors increased interest in Turkish banking sector, the foreign share in the sector continued 2 38,2 31, 29, STATE PRIVATE FOREIGN* PUBLICLY HELD to grow in 26 and reached to 22.4%. (*) Shares belonging to foreigners traded in Istanbul Stock Exchange is not included. Source: BRSA-CBRT.

5 Structure of the Financial Sector Banking Sector s Loans to Deposits Ratio One of the indications of easing of accession to financial services and increasing intermediary functions of the banks is the increase in loans Loans/ Deposits Source: BRSA-CBRT.

6 Asset-Liability Structure of the Sector Banking Sector s Asset Structure Banking Sector s Liability Structure % Mar.6 Haz.6 Eyl.6 Ara.6 Cash+CBRT+Interbank+Due from Banks Securities Gross Loans Other Assets % Mar.6 Haz.6 Eyl.6 Ara.6 Deposits Due to Banks Equity Other Liabilities Source: BRSA-CBRT. Due to diminished crowding-out effect of public sector, the share of loans has increased to 46 percent as of December 26, as a result of the decrease in the shares of securities and other assets. Deposits continue to be the most important source of fund.

7 Loans Gross Loans and Real Annual Growth Rate The credit volume increased by 26.2 percent in real terms in 26 when compared 15 Billion USD Real Growth Rate % Effects of depreciation of Turkish Lira 5 4 to previous year-end and reached billion 3 USD. 1 2 The May-June fluctuations reduced the credit growth rate Source: BRSA-CBRT * Annual percentage change as compared to the same month of the previous year.

8 Loans Distribution of Gross Loans by Borrowers and Real Annual Growth Rates 1 % Share Real Growth Rate % As of the end of 26, loans extended to 6 households increased by 34.6 percent in real 5 terms compared to year-end 25 and their 4 share in total loans continued to rise Household Loans Corporate Loans Real Growth in Household Loans Real Growth in Corporate Loans Source: BRSA-CBRT - Annual percentage change as compared to the same month of the previous year. - Household Loans = Consumer Loans + Credit Cards - Corporate Loans = Total Loans Household Loans

9 Retail Loans Consumer Loans by Type (Excluding NPLs) Billion USD Housing Loans Vehicle Loans Other Con. Loans Housing loans are the most important factor in the increase of consumer loans Real Annual Growth Rates This increase in housing loans was mainly because of the low level of interest rates of housing loans until June as a result of increasing Housing Loans Vehicle Loans Other Con. Loans Source: BRSA-CBRT competition in the banking sector.

10 Non Performing Loans NPL Ratio and Provisions to NPLs 1 The NPL ratio has become flatter as the 9 growth of loans cut speed. 8 The continued high provisioning policy for 7 the NPLs during 26, is regarded as a 6 positive development from a credit risk 5 point of view Provisions/NPL Ratio NPL Ratio (Right-hand axis) Provisions/Gross Loans (Right-hand axis) Source: BRSA-CBRT

11 Profitability ROA and ROE (%) * 25 % % The profitability performance of the banking sector 2 improved in 26, despite the adverse effects of the fluctuations in financial markets. 15 The improved risk management by banks and their 1 increased emphasis on operations related to 5 decreasing FX risk was another reason for the limited impact of the fluctuations. ROA (Right Axis) ROE ROA= Net Profit Average Assets ROE= Net Profit Average Equity SDIF and participation banks are excluded Source: CBRT - BRSA

12 Capital Adequacy Capital Adequacy Ratio The banking sector has own funds well above the % minimum capital requirement The CAR of the sector had decreased from yearend 25 to July 26, due to the fluctuations in the financial markets. However, the gradual market recovery in the subsequent months reversed the immediate adverse affects of the fluctuations and consequently CAR of the sector started to rise again. 15 Dec-1 Dec-2 Dec-3 Dec-4 Dec-5 Jun-6 Sep-6 Dec-6 CAR Source: CBRT - BRSA

13 Financial Strength Index Financial Strength Index (FSI) 12 Index FSI of the sector was by year-end 25, decreasing to as of May 26 due to the fluctuations in financial markets, and then the 1 index recovered to in December 26. In conclusion, despite the May-June period, the decline in FSI was very limited, which reflects the increased resilience of the banking sector against fragilities. 75 Dec-99 Jun- Dec- Jun-1 Dec-1 Ma-2 Jun-2 Sep-2 Dec-2 Ma-3 Jun-3 Sep-3 Dec-3 Ma-4 Jun-4 Sep-4 Dec-4 Ma-5 Jun-5 Sep-5 Dec-5 Ma-6 Jun-6 Sep-6 Dec-6 Financial Strength Index Source: BRSA-CBRT

14 THANKS FOR YOUR ATTENTION! THANKS FOR YOUR ATTENTION! Gülcan YILDIRIM Central Bank of Turkey Banking and Financial Institutions Department Assistant Specialist