[Ankara 30th Reuters]-Turkey's Minister of Finance Albailac said on the 30th: “We have taken innovative measures on bad debts in the banking sector. I think I can get back to the position to do so, ”he urged private banks to reinitiate aggressive lending.
But banking officials and analysts argue that the Turkish government needs to take further steps to understand the full picture of bad debts and make it final.
Bad debt is the worst aftereffect of the currency crisis last year. Since the currency lira fell by around 30%, a number of companies were unable to repay foreign currency loans procured at a low cost. As a result, non-performing loans held by Turkish banks amounted to approximately 124 billion lira as of the end of August this year, a significant increase from 79.5 billion lira in the same period of the previous year.
On the other hand, the government is frustrated that the bank will not embark on measures against bad debts from spring to summer, and the Bank Regulatory Authority's Banking Coordinating and Monitoring Organization (BDDK) will provide 46 billion lira of bad debts this September. Directed to process and record allowance for doubtful accounts.
According to the two bunker, the major bank had already classified the loans of around 10 billion to 15 billion lira as bad loans before the BDDK command.
Nonetheless, banks still have 296 billion lira of “stage 2” credits, which are considered to have a significantly increased risk of repayment, and 15-20% of these will become nonperforming under the worst case scenario. .
The International Monetary Fund (IMF) should also review the method of impairment processing and restructuring of loan receivables in Turkish banks, and conduct stress tests on these assets to improve market confidence. I recommended that.
The IMF pointed out in a report last week that "further steps to clean the bank and corporate balance sheet will boost financial stability and strong and durable medium-term economic growth."
