According to the monthly data of the BRSA; Turkish banks increased their total profit from 58.5 billion liras in 2020 to 92.1 billion liras in 2021.
Avg. NPL ratio decreased from 4.08% to 3.15% as of December compared to the previous year.
In 2021, total assets increased by 51% and total loans by 37%.
The avg. standard capital adequacy ratio fell to 18% compared to 19% at the end of 2020.
The avg. core capital adequacy ratio dropped to 13% compared to 14% at the end of 2020.
The net profit figure of the Turkish banking sector in December was 16.8 billion TL. While public deposit banks showed a stronger performance with 132% quarter-on-quarter profit increase in the related period; Profitability in private deposit banks increased by 49% compared to the previous quarter. Among the factors affecting profitability, the increase in core banking income, commercial profit, net fee and commission income and other banking incomes in December is seen on the positive side. The fact that the loan provisions are high is a factor limiting the profitability of the sector in general. In December, a 25% decrease was observed in the provisions. Along with the increase in the total cost of credit risk, banks can be expected to increase their provisions in an environment where commercial loans are aimed to be increased with the main policy financial instruments and precautionary measures. We think that the current situation may have a limiting effect on banking profits.
The gap between loan and deposit rates remains wide. In December, a partial improvement is observed in the loan-to-deposit spread. The declining risk appetite and the high course of loan rates can be expected to limit loan outflows in the sector. It will be necessary to look at the profit potential of core banking activity and the trend in interest margins in the future. In FX loans, the principles to be applied may cause some slowdown due to high exchange rate uncertainty and encouragement of more lira use in the financial system. Accordingly, we will be observing the effect of rotation from FX to TRY in loan utilization. Companies will probably be less willing to tie their liquidity to a minimum 6-month FX-linked deposit in this environment.
Credit pricing in 2022 will be high due to high risk environment, asset-liability management of private banks and inflation. Therefore, it is possible for bank rates to remain at or above current levels in their normal course. On the public side, we will expect credit outflows to be higher than private ones, with the effect of government-based credit incentives and CGF. The fact that the central bank funding is 14% causes a significant margin gap here. On the other hand, the high course of inflation and its performance throughout the year will have a serious impact on banks’ CPI-indexed securities incomes. We expect this factor to have a positive impact on the securities income of banks. In our current risk parameters and data analysis, we calculate the growth in total loan volume (TRY+FX) as 30.1% in 2022, while we predict the growth in total deposit volume as 24.2%.
Kaynak: Tera Yatırım
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