TURKISH BANKS - Weekly banking review
In the week of 22 March, FX deposits grew sequentially w-w recording 1.7% increase (USD3.6b). Thus, in the past two weeks, the rise in FX deposits reached USD8.3b and since September 2018 the increase hit to USD25.6b. Unlike last week, this week’s growth predominantly occurred in state banks. We also observe some shift from TRY to FX as TRY deposits came down by 0.2%.
There was a pick-up in TRY loans (+0.6% w-w) backed by state banks, while FX loans remained stable. On strong deposit growth, LTD ratio of private banks slid to 98% from 100% a week ago. In y-y terms, state banks’ TRY loan growth reached 16.4% vs. 8.5% contraction for private banks. The sector’s LDR declined 112% (TRY: 139%, FX: 88%) from 113% a week ago. Although sector’s NPL rate was stable at 4.1%, NPL volume increased by 0.3% w-w, the 17.3% ytd hike in participation banks’ NPL volume particularly needs highlighting.
Turkish Banking Index (XBANK) sold out 17.0% this week registering the worst weekly performance since 2Q18. XBANK’s (-1.0%) negative divergence vs EM and European banks YTD now stands at 5.6% and 5.2%, respectively: Both are new highs.
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