TURKEY MONTHLY BANKING MONITOR...Mar 04, 2017 · TURKEY MONTHLY BANKING MONITOR │ MARCH 17...
Transcript of TURKEY MONTHLY BANKING MONITOR...Mar 04, 2017 · TURKEY MONTHLY BANKING MONITOR │ MARCH 17...
TURKEY MONTHLY BANKING MONITOR │ MARCH 17
MONTHLY
BANKING
MONITOR
TURKEY
MARCH APRIL 10th
TURKEY MONTHLY BANKING MONITOR │ MARCH 17
2 Source:BIS Quarterly Review March 2017, Garanti Research
Global credit conditions strengthened in 2H16 according to BIS. While Global interbank credit decreased on a
yoy basis, the pace of the decline moderated. By contrast, after a slight deceleration in 1Q16 credit to non-
banks picked up in this period.
GROWTH OF INTERNATIONAL BANK CREDIT
Levels
CROSS-BORDER BANK CREDIT TO EM
USD Millions
-20
-10
0
10
20
30
10
20
30
40
50
60
Se
p-0
5
Au
g-0
6
Ju
l-0
7
Ju
n-0
8
Ma
y-0
9
Ap
r-1
0
Ma
r-1
1
Feb
-12
Ja
n-1
3
De
c-1
3
No
v-1
4
Oct-
15
Se
p-1
6
VIX Index (lhs) Claims on banks (rhs)Claims on non-banks (rhs)
% YoY changes %
500
1500
2500
3500
4500
Jul-0
7
Jun-0
8
Ma
y-0
9
Apr-
10
Ma
r-1
1
Feb
-12
Jan-1
3
De
c-1
3
No
v-1
4
Oct-
15
Sep-1
6
EM-All Sectors EM-Banks
TURKEY MONTHLY BANKING MONITOR │ MARCH 17
Global Developments
3 Source:IIF Global Debt Monitor April 2017, Garanti Research
Global debt level across all sectors have risen to a record high of 325% of global GDP. While developed
markets see rising public sector debt, EM debt continues to be driven by non-fin. corporates.
EM DEBT by SECTOR
% of GDP
DEVELOPED MARKETS DEBT by SECTOR
% of GDP
0
20
40
60
80
100
120
Households Non-fincorporates
Government FinancialCorporates
December-13 December-14 December-15 December-16
0
20
40
60
80
100
120
140
Households Non-fincorporates
Government FinancialCorporates
December-13 December-14 December-15 December-16
TURKEY MONTHLY BANKING MONITOR │ MARCH 17
Turkey Financial Markets
4 Source: Garanti Research, Bloomberg
MSCI INDICES
Base 100 = Jan 2015
Thanks to equity inflows to EM, Turkish porfolio flows continued to improve in March. Risk premiums stayed
almost stable compared to other EM.
RISK PREMIUMS, 5 YEAR CDS INDICES
Levels
140
190
240
290
340
390
Ma
r-14
Jun
-14
Se
p-1
4
De
c-1
4
Ma
r-15
Jun
-15
Se
p-1
5
De
c-1
5
Ma
r-16
Jun
-16
Se
p-1
6
De
c-1
6
Ma
r-17
EM TURKEY
50
70
90
110
130
150
170
Ma
r-1
4
Ju
l-1
4
No
v-1
4
Ma
r-1
5
Ju
l-1
5
No
v-1
5
Ma
r-1
6
Ju
l-1
6
No
v-1
6
Ma
r-1
7
MSCI EM XBANK Index MSCI Turkey
TURKEY MONTHLY BANKING MONITOR │ MARCH 17
Monetary Policy
5 Source: Garanti Research, Turkstat, CBT, BRSA and Bloomberg
TURKEY: INTEREST RATE CORRIDOR
%
With rising inflation, the Central Bank’s (CBRT) average funding rate increased further to 11.5% in March. The
share of funding through the LLW (Late Liquidity Window) rate of 11.75% increased to 80%.
TURKEY: CBT FUNDING COMPOSITION
Bln TRY
-10
10
30
50
70
90
110
03
/01
/201
7
08
/01
/201
7
13
/01
/201
7
18
/01
/201
7
23
/01
/201
7
28
/01
/201
7
02
/02
/201
7
07
/02
/201
7
12
/02
/201
7
17
/02
/201
7
22
/02
/201
7
27
/02
/201
7
04
/03
/201
7
09
/03
/201
7
14
/03
/201
7
19
/03
/201
7
24
/03
/201
7
29
/03
/201
7
03
/04
/201
7
LLW Total ON Lending 1-week repo
3%4%5%6%7%8%9%
10%11%12%13%14%15%
Ma
r-1
3
Ju
l-1
3
No
v-1
3
Mar-
14
Ju
l-1
4
No
v-1
4
Ma
r-1
5
Ju
l-1
5
No
v-1
5
Mar-
16
Ju
l-1
6
No
v-1
6
Ma
r-1
7
Cie
nto
s
ON Lending-Borrowing ON BorrowingCBT One-Week Repo CBT Cost of FundingCBRT LLW
TURKEY MONTHLY BANKING MONITOR │ MARCH 17
Central Bank Reserves
6 Source: Garanti Research, CBRT
CBRT RESERVES
USD bn
Compared to February, net FX reserves of the CBRT increased in March by almost USD 2bn due to increase
in banks’ FX deposits held at the CBRT. Net reserves are at USD 32.4bn.
GROSS RESERVES
Total Reserves/External Debt to be paid within one year %
%65.6 64%
66%
68%
70%
72%
74%
76%
78%
80%
82%
Se
p-1
4
De
c-1
4
Mar-
15
Ju
n-1
5
Se
p-1
5
De
c-1
5
Mar-
16
Ju
n-1
6
Se
p-1
6
De
c-1
6
Ma
r-1
7
20
24
28
32
36
100
105
110
115
120
125
Ma
r-1
6
Ju
n-1
6
Se
p-1
6
De
c-1
6
Ma
r-1
7
Gross Reserves Net Reserves
TURKEY MONTHLY BANKING MONITOR │ MARCH 17
Turkey Financial Sector
7 Source: CBRT; Garanti Research
FINANCIAL SERVICES CONFIDENCE INDEX-
Financial Services Confidence Index increased somewhat in March. Demand for financial services is
expected to recover in 2Q’17.
DEMAND INDEX FOR FINANCIAL SERVICES
40
45
50
55
60
65
70
75
80
85
90
20
16-0
1
20
16-0
2
20
16-0
3
20
16-0
4
20
16-0
5
20
16-0
6
20
16-0
7
20
16-0
8
20
16-0
9
20
16-1
0
20
16-1
1
20
16-1
2
20
17-0
1
20
17-0
2
20
17-0
3
last 3 months expected in 3 months
155
160
165
170
175
180
Ja
n-1
6
Feb
-16
Ma
r-1
6
Ap
r-1
6
Ma
y-1
6
Ju
n-1
6
Ju
l-1
6
Aug-1
6
Sep-1
6
Oct-
16
No
v-1
6
De
c-1
6
Ja
n-1
7
Feb
-17
Ma
r-1
7
TURKEY MONTHLY BANKING MONITOR │ MARCH 17
Loan Growth
8 Source: Garanti Research , BRSA, CBT
FX ADJUSTED CREDIT GROWTH RATE
% yoy and 13 week ann. rates
YoY Credit growth accelerated in March and reached 14%. The 13 week trend rate jumped to 26%.
14% yoy
26% ann.
The trend rate
(annualized yearly
rate) shows a marked
pick-up mainly
thanks to push in
commercial credits
The yoy credit
growth almost
reaches the
threshold of the
CBRT.
14.1%
26%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Jun-1
3
No
v-1
3
Ap
r-1
4
Se
p-1
4
Feb
-15
Ju
l-1
5
De
c-1
5
Ma
y-1
6
Oct-
16
Ma
r-1
7
YoY 13 week annualized CBT Threshold
TURKEY MONTHLY BANKING MONITOR │ MARCH 17
Loan Growth
9 Source: Garanti Research, BRSA, CBT
COMM. AND CONSUMER LOANS GROWTH RATE
13 week ann. rates
Commercial credits’ trend rate continued to pick up in March thanks to the Government’s Credit Guarantee
Fund. Consumer credits’ momentum is still robust; and especially strong in housing credits.
CONSUMER LOANS
% 13 week ann. rates
31.1%
18%
-2%
3%
8%
13%
18%
23%
28%
33%
Ma
r-1
5
Ma
y-1
5
Ju
l-1
5
Se
p-1
5
No
v-1
5
Jan-1
6
Ma
r-1
6
Ma
y-1
6
Ju
l-1
6
Se
p-1
6
No
v-1
6
Ja
n-1
7
Ma
r-1
7
Commercial Loans (FX adjusted) Consumer Loans
23.2%
1%
14.3%
-11.7%
-25%
-15%
-5%
5%
15%
25%
Ma
r-1
5
Ju
n-1
5
Se
p-1
5
De
c-1
5
Ma
r-1
6
Ju
n-1
6
Se
p-1
6
De
c-1
6
Ma
r-1
7
Housing Automobile
Others Personal Credit Cards
TURKEY MONTHLY BANKING MONITOR │ MARCH 17
Loan Growth
10 Source: CBT Bank Lending Survey 1Q`17, Garanti Research
(>0= Easing; <0= Tightening)
EXPECTED CREDIT DEMAND (in the next 3 months)
Levels
According to the CBRT Lending Survey, the banking sector expects increase in housing and auto credit
demand for 2Q’17. Although some easing in international funding conditions is forecast, domestic funding
conditions will be likely tightened further.
EXPECTED FUNDING CONDITIONS (in the next 3 months)
Levels
-60
-30
0
30
60
90
2015Q1 2015Q3 2016Q1 2016Q3 2017Q1
Commercial Housing Auto GPL
-120
-100
-80
-60
-40
-20
0
20
40
60
80
2015Q1 2016Q1 2017Q1
Domestic Funding conditions International Funding Conditions
TURKEY MONTHLY BANKING MONITOR │ MARCH 17
Housing
11 Source: Garanti Research, CBT, Turkstat latest available data
HOUSE SALES & INTEREST RATE
YoY rates
House sales remained almost flat in Feb’17 on yoy terms. However, although on a decelerating rate
compared to Jan’17, mortgage sales rose by 27% (yoy) in Feb’17 with declining housing interest rates.
HOUSE SALES AND PRICES
YoY rates
-30%
-20%
-10%
00%
10%
20%
30%
40%
50%
0%
2%
4%
6%
8%
10%
12%
Jun-1
4
Oct-
14
Feb
-15
Jun-1
5
Oct-
15
Feb
-16
Jun-1
6
Oct-
16
Feb
-17
house prices house sales yoy-rhs
8%
9%
10%
11%
12%
13%
14%
15%
-60%
-40%
-20%
00%
20%
40%
60%
80%
100%
120%
Ma
r-1
4
Jul-1
4
No
v-1
4
Ma
r-1
5
Jul-1
5
No
v-1
5
Ma
r-1
6
Jul-1
6
No
v-1
6
Ma
r-1
7
house sales yoymortgage saleshousing loans interest rates-rhs
TURKEY MONTHLY BANKING MONITOR │ MARCH 17
Interest Rates
12 Source: Garanti Research, BRSA, CBT
COMM. AND CONSUMER LOANS INTEREST RATES
4week mov.avg.
Interest rates on all consumer credits declined in March, mostly in housing loans. Deposit rates increased
further by 30 bps in March.
DEPOSIT INTEREST RATES
4week mov.avg.
15.4%
11.1%
15.3%
16.7%
10%
11%
12%
13%
14%
15%
16%
17%
18%
Ma
r-1
5
Ju
n-1
5
Se
p-1
5
De
c-1
5
Ma
r-1
6
Ju
n-1
6
Se
p-1
6
De
c-1
6
Ma
r-1
7
Auto HousingCommercial Loans Other Consumer
10.12%
7%
8%
9%
10%
11%
Se
p-1
3
De
c-1
3
Ma
r-14
Jun
-14
Se
p-1
4
De
c-1
4
Ma
r-15
Jun
-15
Se
p-1
5
Dec-1
5
Ma
r-16
Jun
-16
Se
p-1
6
De
c-1
6
Ma
r-17
TURKEY MONTHLY BANKING MONITOR │ MARCH 17
Asset Quality & Credit Risk
13 Source: Garanti Research, BRSA (latest monthly data Feb’17)
NPL RATIO OF THE BANKING SECTOR
%
NPL ratio of the sector rose close to 3.3%. However, its growth rate continues to decline since Oct`16.
NPL RATIO BY SELECTED SUB-SEGMENTS
% & TRY bln
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
Au
g-1
3
No
v-1
3
Feb
-14
Ma
y-1
4
Au
g-1
4
No
v-1
4
Feb
-15
Ma
y-1
5
Au
g-1
5
No
v-1
5
Feb
-16
Ma
y-1
6
Au
g-1
6
No
v-1
6
Feb
-17
Housing NPL Auto NPLGPL NPL Total Credit Cards NPLSME NPL NPL Commercial
3.26%
18.1%
2,0%
7,0%
12,0%
17,0%
22,0%
27,0%
32,0%
2,8%
2,9%
3,0%
3,1%
3,2%
3,3%
3,4%
3,5%
Se
p-1
4
De
c-1
4
Ma
r-1
5
Ju
n-1
5
Se
p-1
5
De
c-1
5
Ma
r-1
6
Ju
n-1
6
Se
p-1
6
De
c-1
6
NPL YoY NPL Growth (rhs)
TURKEY MONTHLY BANKING MONITOR │ MARCH 17
Liquidity
14 Source: Garanti Research, BRSA, CBRT
LOAN TO DEPOSIT RATIO (LTD)
%
TL LTD (Loan to Deposit Ratio) is increasing with increasing credits whereas FX LTD is declining with
increasing FX deposits and declining FX credits.
FX LIQUID ASSETS TO BANKS’ ST EXT.DEBT TO BE PAID IN 1
YR
%
64.2%
45%
50%
55%
60%
65%
70%
75%
De
c-1
4
Fe
b-1
5
Ap
r-1
5
Jun
-15
Au
g-1
5
Oct-
15
De
c-1
5
Fe
b-1
6
Ap
r-1
6
Jun
-16
Au
g-1
6
Oct-
16
De
c-1
6
Fe
b-1
7
75%
85%
95%
105%
115%
125%
135%
145%
155%
165%
Se
p-1
5
No
v-1
5
Ja
n-1
6
Ma
r-1
6
Ma
y-1
6
Ju
l-1
6
Se
p-1
6
No
v-1
6
Ja
n-1
7
Mar-
17
TRY FX Total
TURKEY MONTHLY BANKING MONITOR │ MARCH 17
Deposits of Residents
15 Source: Garanti Research , BRSA, CBT
DEPOSIT GROWTH RATE
% YoY
Total deposits (FX adj.) of residents rose in March on the back of both TL and FX deposits.
FX Deposits & USDTRY
% YoY
15%
-2.3%
19.5%
10.3%
-11%
-6%
-1%
4%
9%
14%
19%
24%
Ju
l-1
5
Se
p-1
5
No
v-1
5
Ja
n-1
6
Ma
r-1
6
Ma
y-1
6
Ju
l-1
6
Se
p-1
6
No
v-1
6
Ja
n-1
7
Ma
r-1
7
TRY FX (in $) Total Total FX adj.
1
1,5
2
2,5
3
3,5
4
80
100
120
140
160
180
200
Ma
y-1
1
De
c-1
1
Ju
l-1
2
Feb
-13
Se
p-1
3
Ap
r-1
4
No
v-1
4
Ju
n-1
5
Ja
n-1
6
Au
g-1
6
Ma
r-1
7
FX Deposits (USD) USD/TRY-rhs
TURKEY MONTHLY BANKING MONITOR │ MARCH 17
Deposit Rates
16 Source: Garanti Research , BRSA, CBT
SPREAD btw TL and USD DEPOSIT RATES
annual %
With increasing TL deposit rates, spreads between TL and USD deposit rates continued to further widen in
March.
DEPOSIT INTEREST RATES IN TL& € & $
4week mov.avg
0%
2%
4%
6%
8%
10%
12%
Sep-1
4
De
c-1
4
Ma
r-1
5
Jun-1
5
Sep-1
5
De
c-1
5
Ma
r-1
6
Jun-1
6
Sep-1
6
De
c-1
6
Ma
r-1
7
TL EUR USD CBT avg.funding rate
0
2
4
6
8
10
12
14
16
Ma
r-0
6
Ma
r-0
7
Ma
r-0
8
Ma
r-0
9
Ma
r-1
0
Ma
r-1
1
Ma
r-1
2
Ma
r-1
3
Ma
r-1
4
Ma
r-1
5
Ma
r-1
6
Ma
r-1
7
TURKEY MONTHLY BANKING MONITOR │ MARCH 17
Profitability
17 Source: Garanti Research, BRSA latest monthly data-Feb’17
NET PROFIT- whole sector
12 month cum., billion TL
Net profit of the sector increased in February by almost 30% compared to January with declining provisioning
expenses. Net profit of public banks increased more than private banks in monthly terms.
NET PROFIT- public & private banks
12 month cum., billion TL
22
27
32
37
42
Apr-
15
Jun-1
5
Aug-1
5
Oct-
15
De
c-1
5
Feb
-16
Apr-
16
Jun-1
6
Aug-1
6
Oct-
16
De
c-1
6
Feb
-17 2
7
12
17
22
27
Feb
-15
Apr-
15
Jun-1
5
Aug-1
5
Oct-
15
De
c-1
5
Feb
-16
Apr-
16
Jun-1
6
Aug-1
6
Oct-
16
De
c-1
6
Feb
-17
public banks private banks incl.foreign banks
TURKEY MONTHLY BANKING MONITOR │ MARCH 17
Buffers
18 Source: Garanti Research, BRSA
CAPITAL ADEQUACY RATIO & CET 1 & TIER 1 RATIO
Both Capital Adequacy Ratio (CAR) and Common Equity Tier 1 increased by 70 bps (MoM) with a decline in
risk weighted assets.
EM CAR & TIER 1 Ratio
Q4’16
*Banks have to maintain additional capital conservation buffer of +0.625% CET1 for 2016; phased-in to
reach +2.5% CET1until 2019.
Besides, banks that are determined as domestically systemic important (D-Sib) are required to add a
certain additional amount of capital.
This is max.+0.5%CET1 for 2016; phased-in to reach max.+2%CET1 until 2019.
Source: Garanti Research and IMF FSI
15.91%
12% local minimum CAR
target
4.5% min.reg. CET1
13.5%
13.47%
6% min.reg.Tier1
4%
6%
8%
10%
12%
14%
16%
18%
Feb-1
5
Ju
n-1
5
Oct-
15
Feb-1
6
Ju
n-1
6
Oct-
16
Feb-1
7
CET 1* CAR Tier 1 Ratio
0%
5%
10%
15%
20%
Co
lom
bia
Arg
en
tin
a
Sin
ga
po
re
Pe
ru
Tu
rke
y
Indo
ne
sia
Ch
ina
Po
land
Mala
ysia
So
uth
Afr
ica
CAR Tier 1
TURKEY MONTHLY BANKING MONITOR │ MARCH 17
Corporate Sector FX indebtness
19 Source: CBRT; Garanti Research
Corporates’ overall FX position continued to improve in Jan’17 as corporates increased FX assets (mainly FX
deposits held at domestic banks)
CORPORATES’ OVERALL FX POSITION
USD bn
CORPORATES NET SHORT TERM FX POSITION
%, USD bn
-250
-200
-150
-100
-50
0
2010
2011
2012
2013
2014
201
5-0
3
201
5-0
6
201
5-0
9
201
5-1
2
201
6-0
3
201
6-0
6
201
6-0
7
201
6-0
8
201
6-0
9
2016-1
0
201
6-1
1
201
6-1
2
201
7-0
1
-20%
-10%
0%
10%
20%
30%
40%
-15
-10
-5
0
5
10
15
Ma
r-1
0
Ma
y-1
1
Ju
l-1
2
Se
p-1
3
No
v-1
4
Ja
n-1
6
Ma
r-1
7
Corporate Net FX Position
USDTRY YoY-rhs
TURKEY MONTHLY BANKING MONITOR │ MARCH 17
Corporate Sector
20 Source: IIF Global Debt Monitor April 2017; Garanti Research
Emerging Market (EM) non-financial corporate debt to GDP continued to increase in 4Q’16, however mainly
driven by local currency debt, posing less risks associated with currency mismatch.
TURKEY: NON-FINANCIAL CORPORATE DEBT to GDP -
Currency Composition
%
EM NON-FINANCIAL CORPORATE DEBT to GDP - Currency
Composition
%
0
5
10
15
20
25
30
35
40
De
c-1
5
Ma
r-1
6
Jun-1
6
Sep-1
6
De
c-1
6
TL FX
68%
-35
15
65
115
165
215
Ho
ng K
on
g
Ch
ina
Sin
gapo
re
Ch
ile
Kore
a
Hu
nga
ry
Isra
el
Turk
ey
Ma
laysia
Czech
Ru
ssia
Saud
i A
rabia
Tha
iland
Pola
nd
India
Bra
zil
South
Afr
ica
Co
lom
bia
Me
xic
o
Indon
esia
Arg
entina
FX Local Currency
TURKEY MONTHLY BANKING MONITOR │ MARCH 17
Corporate Sector
21 Source: CBT; Garanti Research
*latest BoP data Jan`17
ST EXTERNAL DEBT * ROLL-OVER RATIO OF REAL SECTOR
(12m rolling)
%
LT external debt roll-over ratios for banks remain resilient despite high levels of loan repayments and
continuing high base effect. Roll-over ratios for the real sector is sound at close to 145%.
LT EXTERNAL DEBT ROLL-OVER RATIO OF BANKS
& REAL SECTOR (12m.rolling)
%
* ST External Credit Debt of the real sector refers to commercial credits.
144.4%
109.1%
50%
100%
150%
200%
250%
300%
350%
Jan-1
2
Jul-
12
Jan-1
3
Jul-
13
Jan-1
4
Jul-
14
Jan-1
5
Jul-
15
Jan-1
6
Ju
l-1
6
Jan-1
7
Banks Real Sector
96%
98%
100%
102%
104%
106%
Apr-
14
Jul-1
4
Oct-
14
Jan-1
5
Apr-
15
Jul-1
5
Oct-
15
Jan-1
6
Apr-
16
Jul-1
6
Oct-
16
Jan-1
7
TURKEY MONTHLY BANKING MONITOR │ MARCH 17
MONTHLY
BANKING
MONITOR
TURKEY
MARCH APRIL 10th
Garanti – BBVA Research Deniz Ergun [email protected]