According to the monthly data of the BRSA; The total profit of Turkish banks in the January period rose from 4.28 billion liras to 20.1 billion liras (1.44 billion dollars) in the same period of the previous year.
Ave. NPL ratio fell to 3.13%, from 4.08% year-on-year as of January.
Ave. standard capital adequacy ratio increased from 18% annually to approximately 19%.
Ave. core capital adequacy ratio, approximately 14%.
The net profit increase rate of the Turkish banking sector in January, compared to the previous month, was 19.8%. Domestic private deposit banks showed a stronger performance with 31.8% monthly profit increase in the related period; Profitability in public deposit banks increased by 8% compared to the previous month. Among the factors affecting profitability, the strong realization of net interest income and commission income compared to the previous year was effective; In January, it was seen that the commercial transactions of banks and derivative transactions, especially foreign exchange and swap, were also on the positive side. With the increasing inflation, the opening of the margin with the funding rate is effective in the income of the banks from the CPI-indexed securities.
While loan provisions remained high in the previous period, limiting profitability, in January, provisions decreased by 50% compared to the previous month. While the flexibility shown by the BRSA in the classification of NPLs is effective in the form of a decrease in the non-performing loan ratio, the total cost of credit risk may increase in the future with increasing macro and geopolitical risks. On the other hand, the increase in TRY type deposit rates after the FX-linked deposit product came into effect tends to be balanced at the policy rate + 3 band. In the period after January, a decrease was observed in FX deposits with the effect of conversions from foreign currency to TRY. The weighted average 3-month deposit interest rate of the sector is 17.99% as of the week of February 18.
The gap between loan and deposit rates remains wide. In the previous period, we observed that the gap between deposit and loan rates widened in the period when the funding rate was low. Since the end of January, the average weighted commercial loan rates have decreased somewhat. We see the decrease in loan interest rates as positive in terms of loan deposit spread. Declining risk appetite, market uncertainty and the high course of loan rates can be expected to limit loan outflows in the sector. It will be necessary to look at the profit potential of core banking activity and the trend in interest margins in the future.
In 2022, credit pricing will be high due to increased geopolitical risks and macroeconomic environment, high risk profile, asset-liability management of private banks and inflation. We expect public banks to be more effective in loan outflows together with government subsidies. In our current risk parameters and data analysis, we calculate the growth in total loan volume (TRY+FX) as 32.1% in 2022, while we predict the growth in total deposit volume as 26.1%.
Kaynak: Tera Yatırım
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