The headings in the general outlook of the report are listed as follows:
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Central banks of advanced economies have initiated rate cut cycles while the monetary policy stances of emerging economies vary.
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While domestic economic activity slowed in the second quarter of 2024, the rebalancing in domestic demand has continued.
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Turkish lira (TL) and foreign exchange (FX) commercial loan growth rates have converged, and commercial loan growth rates have receded to disinflationary levels.
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Retail loan growth is predominantly driven by personal credit cards (PCC) and unsecured consumer loans, while there has been an upturn in housing loan growth recently.
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Despite the tightening in financial conditions, the deterioration in asset quality indicators remains limited.
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While firms have a tendency to delay trade credit repayments (checks/bills), this has a limited impact on the asset quality of the banking sector.
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Despite the growth in FX loans, firms' buffers and the decline in the ratio of NFC debt to GDP limit the impact of tight financial conditions on NFC balance sheets.
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The ratio of household debt to GDP remained at a low level, while the share of PCC and overdraft account debts increased in the overall composition.
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The share of TL deposits is on the rise, while banks' FX and TL liquidity remains robust.
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On the back of the decrease in the country risk premium, and rating upgrades by credit rating agencies, the improvement in external financing conditions has continued and banks' long-term external borrowing has increased.
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The maturity mismatch between interest rate-sensitive assets and liabilities in the banking sector is below its historical average.
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Despite a decline in the profitability of the banking sector, the sector's internal capital generation capacity remains sufficient to support capital adequacy.
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The banking sector’s resilience is supported by strong capital adequacy.
The full report is available
here.
