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Economy and Banking Sector in Turkey Beirut, Leb a n o n December, 2010

Economy and Banking Sector in Turkey Beirut, Leb a n o n December, 2010. Content. Main features of and recent performance of the Turkish economy Banking sector III . Near-term expectations. Main features and performance of the Turkish economy.

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Economy and Banking Sector in Turkey Beirut, Leb a n o n December, 2010

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  1. Economy and Banking Sector in Turkey Beirut, Lebanon December, 2010

  2. Content • Main features of and recent performance of the Turkish economy • Banking sector • III. Near-term expectations

  3. Main features and performance of the Turkish economy

  4. Turkey has a functioning market economy,capital flows are free and there is no exchange rate restriction for residents and non-residents • Current exchange rate regime is a floating system • The Central Bank has been implementing a formal inflation-targeting framework • Sovereign credit rating, currently is BB “with stable comment” • Services and industry have shares of 60 percent and 30 percent, respectively. • Long term average growth rate is about 4,5 percent.

  5. GNP is about USD 730 billion, 16th largest in the world, 6th in the EU; 2nd in the region after Russia. • In terms of total assets of banks, Turkey is ranked the 15th in the EU. • Member of G-20 countries • Income per capita is around USD 10,000 • Foreign trade volume to GDP is about 45 percent. • Almost half of Turkey's total trade is with the EU. • Population is about 72 million in which the group of 15-64 age has a share of 65 percent. • Unemployment rateis about11percent, recently.

  6. Savings gap; around 5% of Gdp

  7. Quick recovery and stable growth in Gdp

  8. Steady increase in income per capita 7

  9. Net capital inflow; change in structure with increasing volume to TL financial assets

  10. The CB’s fx reserves remained strong but fx reserves s/t debt ratio decline recently 9

  11. Rapid disinflation: inflation has declined tothe historically lowest level during the free market economy.

  12. TL remained rather stable against major currencies as policy rate fell steadily 11

  13. Public sector borrowing requirement is about 3% of Gdp

  14. Government’s demand from the financial sector

  15. Demand for financial assets 14

  16. Banking sector 15

  17. “Turkish banking sector has shown remarkable resilience to the global crisis” No “high risky” assets Small investments in housing financing Well-diversified lending portfolio, mainly to private sector and G-securities High-capital adequacy level with 20% High-liquidity level No change in deposit-quaranty limit, current level is USD 33,000 No financial support form the Government Banking sector has kept financing economic activities Increase in NPLs 2009 and 2010, have been the profitable years 17

  18. Selected items 18

  19. Selected items 19

  20. Foreign owned banks’ share 20

  21. The largest ten banks account for 87% of total assets 21

  22. Rapid growth in banking sector 22

  23. Rapid rise in lending 23

  24. Deposits account for more than half of the liabilities 24

  25. Stronger shareholders’ capital and free capital enabled the banking sector to change its risk structure... 25

  26. Banks continued to finance economy ...

  27. Lending to consumer’s share has risen in total 27

  28. NPLs began to decline in 2010 28

  29. ROE has reached the record in 2009 29

  30. Financial institutions have a share of 40 percent in the total market capitilization 30

  31. Compared with the international figures EU-Turkey Selected indicators, 2009 EU TR Income per capita Euro 23.578 6.134 Bank assets per capita Euro 84.234 5.395 Loans per capita Euro 38.247 2.540 Assets/Gdp % 357 88 Loans/Gdp % 162 42 Consumer loans/Gdp % 8 9 Housing loans/Gdp % 43 5 31

  32. Sustainable growth led by private sector Near-term expectations 2006-2010 2011 2012 2013 average GDP growth % 2,7 4,5 5,0 5,5 Income per capita USD 9.174 10.624 11.405 12.157 Inflation y-o-y, % 8,5 5,3 5,0 4,9 PSBR As % GDP 1,8 2,1 1,8 1,2 Public sector debt As % GDP 43 41 39 37 Current account balance As % GDP -5,0 -5,4 -5,0 -4,9 Unemployment rate % 11,2 12 11,7 11,4 The Government programme target

  33. Thank you. 33

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