Turkey’s banking sector: Facts & Figures
Updated December 2020 – For earlier editions of Facts & Figures click here
Economic activities had a stagnant course in the first half of 2019. As of the end of the first half of 2019, real GDP declined on an annual basis. However, economic recovery started with the second half due mainly to the measures taken to support employment and the growth in loans. With the recovery in the second half, Turkish economy grew by 0.9% in 2019. The Consumer Prices Index (cpi) and producer price index (Ppi) increased by 11.8% and 7.4%, respectively. The ratio of current account surplus to GDP was 1.1%. There was a net capital outflow due to reduced portfolio investments but net international reserves increased in 2019.
The number of banks operating in the banking sector was 53 as of December 2019. Of these 34 were deposit banks, and 13 were development and investment banks. Of the deposit banks, three were state-owned banks, and nine were private banks. There were six participation banks in Turkey.
The share of deposit banks in total assets was 87%, while the shares of development and investment banks and participation banks were 7% percent and 6%, respectively.
The number of employees remained almost the same as the end of the previous year, with 205,000 people in 2019. The number of branches declined by 198 to 11,576. In 2019, the number of employees per 100,000 people decreased by 7 to 227, while the number of branches decreased by 0.5 to 12.3.
As of December 2019, the share of the five largest banks in total assets was 57%. According to the loan and deposit volume, the share of the five largest banks in total increased to 62% and 58%, respectively.
Total assets reached USD 756 billion as of 2019. The ratio of total assets to GDP was 105%. Loans and securities had, shares of 59% and 15% in total assets, respectively.
The loan volume of the banking sector reached USD 447 billion and the ratio of loans to GDP was 62%. Of total loans, 53% was extended to large scale companies and project financing, 24% to SMEs, and 23% to consumers.
Loan-to-deposit ratio decreased by 14 percentage points to 104% compared to the previous year. This ratio was 130% in TL loans and deposits, and 78% in Foreing Exchange (FX) loans and deposits as of December 2019.
The ratio of non-performing loans before specific provisions to total loans was at 5.3%. This ratio was 5.8% in corporate loans and 3.8% in consumer loans.
Of assets, 57% was financed by deposits, while 22%, by non-deposit funds. The ratio of shareholders’ equity to total assets was 11%.
Total deposits grew by 26% in nominal terms and 22% in fixed exchange rates to USD 432 billion. The share of TL deposits in total deposits decreased by 2 percentage points to 49%.
Shareholders’ equity increased to USD 83 billion. Capital adequacy was at a high level in both core and legal capital. Capital adequacy ratio was 18.4%. The core capital adequacy ratio (Tier-1) remained at a high level and was 14.2%.
Interest income and interest expenditures increased by 14% and 16% respectively in 2019. Net interest income increased by 11%.
The ratio of interest margin to average assets continued to decline, to become 2.5% in 2019. Net profit decreased by 17% to USD 8.4 billion. In 2019, average return on equity was 11%. Average return on assets decreased by 200 basis points to 1.2% level compared to the previous year.
As of December 2019, debit card and credit card transaction volume was USD 336 billion, and its ratio to GDP was 46%. The number of active customers using digital banking transactions reached 51 million; 96% of the customers were individual, and 4% were corporate. In 2019, the volume of online banking transactions increased by 19%, while mobile banking volume increased by 31%.
Contributor: Ümit Ünsal email@example.com