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Garanti Expects a 25% Growth in Loans to Smaller Companies

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June 27 (Bloomberg) -- Turkiye Garanti Bankasi AS, Turkey’s biggest lender by market value, expects loans to small- and medium-sized companies to expand 25 percent this year, Deputy Chief Executive Nafiz Karadere said.

Loans to SMEs grew 12 percent in the first four months from a year ago, Karadere said at a news conference in Istanbul today. The shares rose 1.5 percent at 6.90 liras at 3:21 p.m. in Istanbul, gaining for a second day, to the highest level in more than two months.

“We support small-and medium-sized enterprises and tradespeople who play a large part in Turkey’s economic growth in every way,” he said.

Garanti’s loans to SMEs totaled 22.4 billion liras ($12.4 billion) “at the moment,” according to Karadere. Its total loans rose 18 percent to 83.3 billion liras over a year to March, according to the lender’s first-quarter results filed with the Istanbul Stock Exchange last month. Total lending by the industry grew 21 percent to 741.6 billion liras in the year to June 15, according to the banking regulator.

Garanti expects the value of credit-card transactions to grow between 18 percent to 19 percent this year, from 55 billion liras in 2011, Onur Genc, the bank’s general manager for payment systems, said in an interview today.

“We saw slight growth in non-performing credit-card loans in the first six months of the year due to the shrinking economy,” Genc said. “The growth in non-performing loans is a bit slower now, but still faster than last year.”

Garanti holds a 17 percent share in Turkey’s credit-card market and expects to issue about two million new cards this year, according to Genc.

Turkey is targeting 4 percent economic growth this year, compared with the previous year’s 8.5 percent.

A 15 percent rise in loans will be “reasonable” this year as economic growth slows, Deputy Prime Minister Ali Babacan said on June 7.

To contact the reporter on this story: Sibel Akbay in Istanbul at sakbay@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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