Turkiye Halk Bankasi AS Chief Executive Officer Suleyman Aslan said Turkey’s central bank and regulators may need to act should bad loans in the nation’s financial system worsen.
Halkbank, as the lender is known, is Turkey’s biggest listed state-run bank. Aslan, speaking in a televised interview with the CNBC-e news channel today, didn’t specify what measures he wanted policymakers to take, though he said the central bank’s average lending rate to banks was “rather high.” He also said lenders’ “asset structures are not breaking down” as a result of bad loans.
Halkbank shares fell 3.4 percent to 15.60 liras at 2:18 p.m. in Istanbul trading. JPMorgan Chase & Co. removed Halkbank from its top 10 stock list for central and eastern Europe, the Middle East and Africa today.
Turkey’s economic growth is forecast to slow to 2.3 percent this year from 8.5 percent in 2011, the International Money Fund said in April, while central bank data shows non-performing consumer loans rose 4.4 percent in the first six months of 2012 compared with a year earlier, led by unpaid credit-card bills.
Aslan today forecast that the Turkish central bank will ease monetary policy, reducing the upper end of its interest-rate corridor of between 5.75 percent and 11.5 percent. Current levels of market interest rates are responsible for a slowdown in lending by banks, he said.
Turkish banks’ provisions may increase this year because of non-performing loans caused by a slowdown in the economy, Duygun Kutucu, an analyst at EFG Istanbul Securities, said in a telephone interview on July 31.