Turkish bank loan growth up, surpasses c.bank target

Turkish bank loans have grown 25.5 percent so far in 2011, data up to Sept. 30 showed, accelerating from 23.2 percent as of the previous week and surpassing the central bank’s yearly growth target of 25 percent after only nine months.

Year-on-year, bank loans were up 39 percent as of Sept. 30, up from 37.8 percent on Sept. 23, according to weekly data released by banking regulator BDDK.

To rein in domestic demand and limit a record high current account, Turkey’s central bank has ramped up required reserve ratios (RRRs) on banks’ lira deposits, while keeping interest rates at historic lows to deter foreign capital inflows.

Last week, the bank said it was lowering banks’ forex RRRs to encourage a lengthening of maturities, in a move providing some $1.3 billion in liquidity to the market.

The central bank had said it wanted to keep loan growth to 25 percent this year, after loans expanded 34 percent in 2010, but that target has looked increasingly out of reach.

Turkey’s Deputy Prime Minister Ali Babacan said late last month the government will not question banks if they show more than 25 percent loan growth, a signal that they are satisfied with the current pace of the slowdown in lending.

BDDK said on Monday total loans amounted to 671.6 billion lira as of Sept. 30, up from 535.34 billion lira at the end of last year.

The regulator has imposed higher charges on banks whose consumer loans exceed 20 percent of total loans and changed its method for calculating consumer credit risk in relation to capital adequacy ratios.

But with the outlook for the global economy deteriorating, the central bank said last month all policy instruments could be eased if needed, and on Sept. 12 it said banks could meet part of their reserve requirements in foreign currencies until the end of the month to ease bank liquidity. (Reporting by Can Sezer, Writing by Jonathon Burch, Editing by Catherine Evans)



Oct 10 (Reuters)