Turkey’s banks’ profits surge 400 percent in H1

Turkey’s banks’ profits surge 400 percent in H1
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The net profit of Turkish banks leapt 400 percent compared to last year, BDDK said

The Turkish banking sector’s net profit jumped 400 percent from a year earlier to TL 169.15 billion in the first half of the year, the banking watchdog BDDK said on Wednesday 

The news came at a time when independent research groups claim that the inflation hit 176 percent as low income households turn to consumer loans for their everyday essentials and fall into a spiral of debt.

Data from the Banks Association of Turkey (TBB) Risk Center shows that banks started legal proceedings concerning the debt owed by nearly 750 thousand in personal loan or personal credit card debt in the January-May 2022 period, an 80 percent increase from the same period last year. 

In total, more than 4 million people have not paid their personal loan and personal credit card debt as of May 2022.

Banks’ annual net interest revenues increased 204 percent as of June, as the banks borrow with a low cost from the Central Bank’s 14 percent interest rate, Dunya newspaper reported.

The gap between inflation and interest rate is one of the main factors in the profitability record of banks, Diken said

“Due to hikes in the bond prices as interest rates fell, banks made serious money off those inflation-indexed bonds,” DW Turkish cited Atilim Murat, an economist from TOBB University of Economics and Technology as saying.