The volume of bad loans on the books of Turkish banks has soared to its highest level since December 2010 the country’s Banking and Regulatory Authority (BDDK) has reported.
According to the BDDK the non-performing loans at the end of November topped 3.74 percent of all loans. At the beginning of the year that figure stood at 2.95 percent.
BDDK says total outstanding loans on the books of Turkish banks stood at 2.452 trillion lira ($457 billion), of which almost 92 billion lira was non-performing. At the beginning of the year non-performing loans stood at 63.99 billion lira – and increase of 28 billion or a 44 percent increase in non-performing loans since the beginning of the year.
The ratio of non-performing loans and loans under close monitoring in the second tier compared to the total amount of loans is estimated to be 15 percent.
During the 2009 economic crisis the rate of non-performing loans was 5.59 percent when the economy had shrunk by 4.7 percent.
According to journalist Emre Deveci’s from the mass circulating Cumhuriyet Daily newspaper, despite the decrease in interest rates, the repayment of loans by borrowers will remain under pressure.
Commercial loan interest rates that opened 35.38 percent in the week of 12 October , fell to 28.75 precent in the week of 30 November.
Consumer loan interest rates that opened at 38.27 percent on average in the week of 12 October fell to 31.81 percent in the week of 30 November.
Erol Bilecik, the president of the Turkish Industrialists’ and Businessmen’s Association said in Ankara last week “We have to accept, before contraction in credit ends, the economic crisis will not end.”