Akbank TAS, the Turkish lender part-owned by Citigroup Inc., and Yapi & Kredi Bankasi AS slumped the most this month after the nation’s banking regulator took steps to rein in consumer loans and credit card spending.
Akbank fell 4.6 percent, the steepest drop since July 5, to 7.10 liras at the close in Istanbul. Yapi & Kredi, the bank co-owned by Koc Holding AS and UniCredit SpA, slid 2.9 percent to 4.37 liras, the biggest loss since July 31. The 16-member banking index declined 3.5 percent to the lowest since July 11, while the Borsa Istanbul National 100 Index retreated 2.6 percent.
Turkey’s Ankara-based Banking Regulation and Supervision Agency announced measures on its website after markets closed on Aug. 16 to “control the rise in consumer loans” and “increase the share of commercial loans in total lending.” The level of credit-card loans is highest at Akbank and Yapi & Kredi among the six largest publicly traded banks, Ekspres Invest analysts Cihan Saraoglu and Oguzhan Evranos said in an e-mailed report.
The measures “pose a greater risk for banks in which the share of credit cards in total loans is higher,” Barkin Yalcin, an analyst at Meksa Investment in Istanbul, said by phone today. The steps taken by the regulator include reclassifying overdraft accounts and credit card debt as consumer loans so they can be subjected to general provisioning rules.
The extended definition of consumer debt means they will make up 39 percent of all loans for Akbank and 36 percent each for Yapi & Kredi and Turkiye Garanti Bankasi AS, the analysts at Ekspres said.
Garanti’s shares fell 4.3 percent to 7.18 liras, declining for the third day.
Turkey’s two-year benchmark note yields rose 18 basis points to 9.39 percent in Istanbul, the highest since July 26. The yields are up 4.6 percentage points from a record low of 4.79 percent reached on May 17.
Yields on U.S. 10-year bonds added 3 basis points to 2.85 percent, heading for the highest level since July 2011. Federal Reserve Chairman Ben S. Bernanke said May 22 he may scale back monetary stimulus if the economy shows signs of sustained improvement. The U.S. central bank will publish the minutes of its July 30-31 meeting on Aug. 21.
“The continuing rise in interest rates is also a factor in the banks’ decline,” Tunc Obuter, the head of trading at Garanti Investment in Istanbul, said in e-mailed comments. “The U.S. 10-year yield determines rates across the world.” Turkey’s capital inflows dropped to $3.5 billion in June, down from $8.9 billion in the same month last year, according to central bank data published Aug. 14.