News Column

Weak lira, high interest expenditures hit bank profits in H1

September 3, 2014

ISTANBUL (CIHAN)- The profits earned by banks operating in Turkey dropped by 10 percent year-on-year in the first half of 2014 due to a weakening of the lira and a surge in interest expenditures, according to the Turkish Banks Association (TBB).

The TBB's June 2014 Turkish Banking System Report, released on Monday, announced that bank profits fell 10 percent on the weak lira and increasing interest payments of the banking industry in the first half of this year. The report revealed that interest expenditures soared 56 percent while an increase in interest income remained at 26 percent year-on-year during the first half, producing a 3 percent increase in net interest revenue in Turkish lira, but a decrease of 13 percent in dollars.

According to the report, the ratio of total outstanding loans to total assets increased slightly -- by 1 percent -- to 60 percent.

As of June 2014, 44 banks were operating in Turkey; their number of branches increased by 79, to 11,131, since March.

Employees of all banks were reported to number 198,640.

The five largest banks operating in Turkey hold 58 percent of the assets that the banking system enjoys. Those five banks possessed 60 percent of all deposits as of June 2014.

(Cihan/Today's Zaman) CIHAN

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Source: Cihan News Agency (Turkey)

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