Turkish banking sector ends year better than expected
Managers at top state, private banks see rosy 2020 with single-digit inflation, low-interest environment
The Turkish banking sector will end 2019 better than expected, with a recovery in macroeconomic indicators such as growth, inflation, and unemployment, said the heads of both state and private banks.
Bank managers expect the sector to continue to support the economy in 2020.
Abdi Serdar Ustunsalih, the CEO of state lender Vakifbank, stressed that next year will be a "transformative year" for the Turkish economy.
Saying that uncertainties in global markets create risks in the short term, Ustunsalih said developments in the medium- and long-term will favor developing countries, especially Turkey.
"Capital flows to those countries will accelerate and borrowing costs will fall," benefiting the Turkish banking sector, he predicted.
Unstunsalih stressed that after the rebalancing process, Turkey is entering a year set for growth amid soaring expectations.
‘Ending year on positive note'
Inflation should be in the 11%-12% range in the first half of 2020 due to seasonal effects and changes in service prices due to wage hikes, said Recep Bastug, the CEO of Garanti BBVA.
But barring any serious shocks, inflation could fall below 9% by the end of 2020, he added.
"Banks will continue to back the economy in 2020, with a rise in domestic demand, regulations encouraging credit growth, and continuation of the low-interest environment," he noted.
He also said that Turkey is ending the year with a more positive picture than expectations for the economy at large, including the banking sector.
Anticipating that inflation will fall to single digits by the end of next year, Temel Guzeloglu, the CEO of QNB Finansbank, said Turkey's Central Bank would continue to cut interest rates in parallel steps in 2020.
"We expect growth of 0.5%-1% for 2019," said Meliksah Utku, the CEO of Albaraka Turk, adding that growth in the last quarter will have a positive effect on the whole year.
The fall in interest rates and revival of the real sector will lead to a decrease in non-performing loans, he noted.
Utku said at its last meeting the Central Bank cut the policy rate by 200 basis points, and expects it may cut interest rates by 2% unless there is a fall in inflation or extra shocks in 2020.
*Writing by Aysu BicerAnadolu Agency website contains only a portion of the news stories offered to subscribers in the AA News Broadcasting System (HAS), and in summarized form. Please contact us for subscription options.