Transcript No Slide Title

Economy and Banking Sector
in Turkey
Beirut, Lebanon
December, 2010
Content
I.
Main features of and recent performance of the
Turkish economy
II.
Banking sector
III. Near-term expectations
1
Main features and performance of the
Turkish economy
2
•
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.
3
•
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 rate is about 11 percent, recently.
4
Savings gap; around 5% of Gdp
Savings and investment balance (As % of Gdp)
14
12
10
8
6
4
2
0
-2
-4
-6
-8
-10
-12
02
03
04
Balance
05
06
07
08
Public sector
5
09
10
exp
11 t
12 t
13 t
Private sector
Quick recovery and stable growth in Gdp
GDP growth (% )
12
10
8
6
4
2
0
-2
02
03
04
05
06
07
-4
-6
6
08
09
10 11 t 12 t 13 t
exp
Steady increase in income per capita
Income per capita (USD)
13.000
12.000
11.000
10.000
9.000
8.000
7.000
6.000
5.000
4.000
3.000
02
03
04
05
06
07
7
08
09
10
exp
11 t
12 t
13 t
Net capital inflow; change in structure with increasing
volume to TL financial assets
Net capital flows
(USD billion)
60
50
40
30
20
10
0
-10
02
03
04
05
06
07
08
-20
Non-financials
Portfolio investments
Deposits
8
FDI
Financials
09
10 Spt
The CB’s fx reserves remained strong but fx
reserves s/t debt ratio decline recently
CB Fx reserves (billion USD) and
Fx reserves/Short-term external debt (% )
90
180
80
170
70
160
60
150
50
140
40
130
30
120
20
110
10
100
02
03
04
05
06
Fx reserves
07
08
Ratio
9
09
10 Spt
Rapid disinflation: inflation has declined to the
historically lowest level during the free market economy.
Inflation (annual, %)
35
30
25
20
15
10
5
0
02
03
04
05
06
07
10
08
09
10
exp
11 t
12 t
13 t
TL remained rather stable against major
currencies as policy rate fell steadily
TL/(0,5(USD+Euro)), CB policy rate (%)
1,9
50
1,8
40
1,7
30
1,6
20
1,5
10
1,4
0
02
03
04
05
06
TL/(USD+Euro)
07
08
09
Policy rate (right)
11
10 Nov
Public sector borrowing requirement is about 3%
of Gdp
Public sector balance
(as % of GDP)
4
2
0
-2
02
03
04
05
06
07
-4
-6
-8
-10
-12
12
08
09
10
exp
11 t
12 t
13 t
Government’s demand from the financial sector
Public sector and financial sector
(%)
2002
2009
2010 Spt
Domestic debt/Demenad for TL and Fx money
106
65
62
Domestic debt/GDP
43
35
33
Total debt/GDP
73
46
44
Domestic debt/Banking sector assets
70
40
38
13
Demand for financial assets
Financial assets
(As % of Gdp)
2010 Spt
Money and deposits
52
Securities (market capitilization)
44
G.securities
33
Investment funds
2
Total
TL
Fx
131
116
15
14
Banking sector
15
16
“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
Selected items
Banks in Turkey
Selected indicators
As of September, 2010
Number of banks
Numer of branches
Employment
Deposit banks
banks
Investment and
development b
Participation
banks
Total
33
12
4
49
9.294
44
533
9.871
171.957
5.394
11.442
188.793
18
Selected items
Banks in Turkey
Selected indicators
As of September, 2010
USD billion
Assets
Loans
Deposits
Shareholders equity
Deposit banks
banks
Investment and
development b
Participation
banks
Total
595
302
376
75
19
10
0
9
28
17
21
4
642
329
397
88
19
Foreign owned banks’ share
Ownership structure (%)
Free flot
2002
2009
2010 June
19,5
19,7
*weighted share in non-public shares
20
Non residents' share*
Shareholders' equity
Non residents' share*
Total assets
5,4
24,5
21,7
3,2
23,0
20,7
The largest ten banks account for 87% of
total assets
Concentration ratio
%
Largest five*
Assets
Deposits
Loans
Largest ten*
Assets
Deposits
Loans
* According to total assets
21
02
10 June
58
61
55
63
66
57
81
86
74
87
91
85
Rapid growth in banking sector
Total assets (dep+inv banks)
USD billion
700
%
90
85
80
75
70
65
60
55
50
600
500
400
300
200
100
02
03
04
05
06
Total assets
07
08
09
As % of GDP (right)
22
10 Spt
Rapid rise in lending
Selected balance sheet items
As % of Gdp
Securities portfolio
TL
Total loans
TL
Fx
Total assets
TL
Fx
2010 GDP estimated
23
2002
2010 Spt
25
15
15
7
8
61
34
26
26
22
43
32
12
85
63
22
Deposits account for more than half of the
liabilities
Selected balance sheet items
As % of Gdp
Deposits
TL
Fx
Non-deposit source
Shareholders' equity
Total liabilities
TL
Fx
2010 GDP estimated
24
2002
2010 Spt
39
17
23
10
7
61
30
31
52
36
16
15
12
85
59
26
Stronger shareholders’ capital and free capital enabled the
banking sector to change its risk structure...
Shareholders' equity, free capital (USD billion)
and Capital adequacy ratio (%)
100
30
80
25
20
60
15
40
10
20
5
0
0
02
09 Dec
Shareholders' equity
Free capital
25
10 Spt
CA (right)
Banks continued to finance economy ...
Loans
( USD billion)
Total loans
Corporates
SMEs
Consumers
Securities portfolio
Deposit, development and investment banks
26
2002
2010 Spt
32
317
28
0
4
209
69
108
52
190
Lending to consumer’s share has risen in total
Breakdown of total loans
(%)
Corporates
SMEs
Consumer+credit cards
Consumer
Housing
Automobile
Others
Credit cards
Total
2002
2010 Spt
87
66
22
34
25
11
1
13
9
100
13
4
1
1
2
8
100
*Deposits, investment and development banks
27
NPLs began to decline in 2010
NPLs*
(%)
26.12.2008
31.12.2009
28.10.2010
Total (before provisions)
Total (after provisions)
Provisions for NPLs
3,6
0,7
80,8
5,7
1,0
82,9
4,4
0,6
85,4
Cosumer loans
Credit cards
Corporate
SMEs
2,3
7,2
3,6
5,3
4,3
11,6
5,3
8,4
3,1
9,7
4,2
5,9
* Deposits, investment and development banks
28
ROE has reached the record in 2009
Real return on shareholders' equity
(Annual, adjusted by consumer inflation % )
15
10
5
0
-5
02
03
04
05
06
-10
-15
-20
29
07
08
09
10 Spt
Financial institutions have a share of 40
percent in the total market capitilization
Market capitilization of financial institutions
45
125
40
100
35
75
50
30
25
25
0
20
02
03
04
05
06
07
08
09
Market cap. (USD billion)
Share in the total market cap.(% , right)
30
10 Oct
Compared with the international figures
EU-Turkey
Selected indicators, 2009
Income per capita
Bank assets per capita
Loans per capita
Assets/Gdp
Loans/Gdp
Consumer loans/Gdp
Housing loans/Gdp
Euro
Euro
Euro
%
%
%
%
31
EU
TR
23.578
84.234
38.247
357
162
8
43
6.134
5.395
2.540
88
42
9
5
Sustainable growth led by private sector
Near-term expectations
GDP growth
Income per capita
Inflation
PSBR
Public sector debt
Current account balance
Unemployment rate
2006-2010
average
2011
2012
2013
2,7
9.174
8,5
1,8
43
-5,0
11,2
4,5
10.624
5,3
2,1
41
-5,4
12
5,0
11.405
5,0
1,8
39
-5,0
11,7
5,5
12.157
4,9
1,2
37
-4,9
11,4
%
USD
y-o-y, %
As % GDP
As % GDP
As % GDP
%
The Government programme target
32
Thank you.
33