When commercial loan interests exceed a certain limit with the regulations of the Central Bank of the Republic of Turkey (CBRT), the obligation to purchase additional securities and the doubling of TL deposit interests compared to commercial loan rates reduced the banks’ appetite for loans. The banking sector, which has become very difficult to obtain loan interest income, has found the solution to shorten the maturity. According to the January data of the BRSA, the share of short-term loans in total loans increased by almost 12 points compared to January last year and reached 44 percent. Likewise, the share of medium and long-term loans decreased to 56 percent from 68 percent in January last year. Banking sector sources pointed out that the regulations eroded the credit appetite and that the sector took care not to exceed the 36-month maturity in order not to increase the risk.
With the communiqué of the Central Bank in August, the banking sector imposed the obligation to establish additional securities at the rate of 20 percent if the interest rate on commercial loans increased by 1.4 times the reference interest rate of the Central Bank, at the rate of 20 percent, and at the rate of 90 percent if it was 1.8 times higher. With the policy rate cuts that started after that, commercial loan rates entered a rapid downward trend. In the same period, the TL deposit rate target was brought before the banking sector. In order to keep the TL deposit rate and avoid the establishment of additional securities, the sector increased TL deposit interests.
TL deposit interest rates are increasing rapidly
According to the Central Bank data, the most preferred interest rate on TL deposits with a maturity of up to 3 months is 26.95 percent, while the interest rate on commercial loans excluding corporate credit cards and KMH is 12.81 percent. In other words, TL deposit interest has exceeded twice the TL commercial loan interest. This, in turn, became a cost-increasing factor and a strain on the balance sheet in the banking sector.
The monthly data of the BRSA revealed that the sector avoided taking longer-term risks, especially by shortening the maturity of commercial loans. Banking sector experts also emphasized that the net interest income is negative at the moment, and therefore the desire to give medium and long-term loans has decreased. Experts pointed out that mostly revolving or short-term installment loans are given.
Maturity of business loans fell sharply
The ratio of short-term loans to total loans in the banking sector was 32.08 percent in January last year. This rate increased to 43.94 percent in January this year. The share of medium and long-term loans decreased from 67.92 percent in January last year to 56.06 percent in January this year. In the banking sector, maturities of up to 12 months are defined as short-term, 12 months to 60 months, and medium-long terms. According to the information given by the sources, the longest term in the banking sector is 36 months.
According to the January data of the BRSA, the ratio of medium-long-term business loans in total loans decreased from 12.5 percent to 8.83 percent in January this year. e declined. While short-term business loans increased by 98.51 percent compared to January last year, the growth of medium-long-term business loans remained at 11.85 percent. Commercial loans with installments also achieved a growth of 336.4 percent in the short term, while commercial loans with medium and long term installments grew by 19.63 compared to the previous year. Export credits increased by 216.8 percent in the short term, while the share of medium-long-term export credits in total credits decreased despite an increase of 44.3 percent. According to the calculation made from the data, the share of short-term export credits in total credits increased from 3.47 percent in January last year to 6.96 percent, while the ratio of medium-long-term export credits in total credits decreased from 3.15 percent to 2.88 percent. e now.
Short-term consumer loans also increased by 246 percent compared to the previous year, while the growth in credit cards was 130.5 percent. Medium-long-term consumer loans also increased by 29.7 percent, and the increase in credit cards was calculated as 171.8 percent.
Blockage for 50 percent to commercial loan
While commercial loan interest decreased, housing loan interest skyrocketed
Upward movement in commercial loans
Limitation on commercial loan commissions of banks