TURKISH BANKS - Weekly banking review
In the week of 29 March, FX deposits grew sequentially w-w, recording a 1.1% expansion (USD2.2b) driven mainly by retail accounts. We also observed some shift from TRY to FX as TRY deposits came down by 1.9%. As for loans, TRY loans continued to increase (+1.7% w-w) backed surprisingly by private banks, while FX loans were almost stable. Lately, we are seeing that private banks have become quite active in CGF lending, which fuels their loan growth, in our view. On the back of strong loan growth, private banks’ LTD ratio rose to 101% from 98% a week ago.
We completed 1Q19 with 4.6% loan and 7.9% deposit growth. State banks recorded 10.3% QTD TRY loan growth, while that for private banks was 1.9%. In the first quarter, FX deposits marked an eye-catching 11.8% expansion, while TRY deposits retreated by 2.8%. We think 1Q19 results back our conviction that 12% loan growth is achievable by year-end and is possible to achieve even higher than that.
In y-y terms, state banks’ TRY loan growth reached 17.3% vs. 6.1% contraction for private banks. The sector’s LDR climbed to 114% (TRY: 145%, FX: 87%) from 112% a week ago.
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