Assessment from Fitch for Turkish banks
Sharing its Turkish Banks Data Watch Report, Fitch Ratings reported that steps taken toward the simplification of macroprudential regulations supported the margins of Turkish banks in the third quarter of this year.
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According to the latest Turkish Banks Data Watch Report from international credit rating agency Fitch Ratings, which covers the last three months, Turkish banks improved their performance in the third quarter of the year due to the simplification of macroprudential regulations, as well as the impact of factors such as rising interest rates and better-than-expected returns on inflation-indexed bonds.
While increasing net interest income largely offset the still-high and rising costs of Turkish Lira deposits, trading gains and fees also continued to support performance, albeit at lower levels than in previous periods.
A slowdown in credit growth was observed in the third quarter of the year due to the impact of rising interest rates.
According to Fitch Ratings, which expects growth to remain limited given the regulatory restrictions on credit growth and high lira interest rates during the monetary tightening process, the average share of foreign currency wholesale funding/non-equity for the banks covered remained quite stable at the end of the third quarter.
Fitch's Turkish Banks Data Watch Report covers 13 banks that account for 83 percent of the banking sector assets in Turkey.