Critical Developments in Turkish Banking Sector: Consumer Loans Surge Amidst Declining KKM Balances
According to the latest weekly bulletin from the Banking Regulation and Supervision Agency (BDDK), Turkiye’s banking sector saw a significant increase in its credit volume during the week ending August 9th. The sector’s credit volume grew by 103.41 billion Turkish Lira (TL), bringing the total to ₺14.24 trillion. In the same period, total deposits, including interbank deposits, surged by ₺179.50 billion, reaching an impressive ₺16.96 trillion.
Consumer loans also experienced notable growth, with an increase of ₺12.35 billion, raising the total to ₺1.77 trillion. This growth was primarily driven by housing, vehicle, and personal loans. However, there was a decline in KKM (currency-protected deposit) balances, which fell by 2.8%, equivalent to a decrease of ₺49.30 billion, bringing the total down to ₺1.71 trillion.
Despite the overall positive trends in credit and deposits, individual credit card debt recorded a slight decrease of 0.4%, resulting in a total of ₺1.53 trillion. Additionally, the sector’s non-performing loans increased by ₺2.62 billion, totaling ₺246.91 billion, with ₺187.32 billion set aside as provisions.
During this period, the legal equity of the banking sector also saw an increase, rising by ₺2.54 billion to reach ₺3.07 trillion. These figures underscore the complex dynamics within Turkiye’s banking sector, highlighting growth in key areas alongside challenges such as rising non-performing loans and declining KKM balances.
Source: AA / Prepared by Irem Yildiz