Increased pressure on banks

Banking The sector spent the year 2022 keeping up with the new regulations. Despite the 9 percent reduction in the policy rate to one digit and the successive regulations, access to financing continues to be a problem that also awaits a solution in the new year. Former Deputy CEO of Ziraat Bank, Prof. Dr. Şenol Babuşcu stated that as the election date approaches, the pressure on banks will increase and profitability risk in the banking sector will come to the fore this year.

BINDING DECISIONS

Recalling that 2022 seems to be a profitable year for banks, but a stressful year due to strong public pressure, Babuşcu said that economic management will continue to make irrational and more challenging decisions for banks this year as well. Babuşcu pointed out that there may be a loan repayment problem due to the pressures on the use of intense loans during the election period, however, if the practices regarding loan classification during the pandemic period are terminated, banks will they will face the situation of transferring many loans to non-performing loans.

THE PROBLEM OF RESOURCES CONTINUES

Saying: “All these risks can put pressure on banks’ capital adequacy ratios which still appear to be doing well,” Babuscu stressed that it would be important for banks to maintain their asset quality at this point. Recalling that the monetary tightening trends of countries globally, high CDS scores and low country and bank ratings make it difficult for banks to find funds from abroad and the cost of recourse is very high, Babushcu said that the banks will use weighted deposits and other sources of internal financing in 2023. he said.

Prof. Dr. Mr. Babushcu

Banks’ Weak Stomach Government Bonds

Baskent University Head of the Department of International Banking and Finance Prof.Dr. Şenol Babuşcu listed the weaknesses of the banking sector as follows: “First and most important is the interest rate risk related to low-interest, long-term, and large-amount domestic government debt securities (GDDS) purchased under pressure, and to loans granted under pressure with low interest rates. In addition, there is a possibility that loans made due to future macroeconomic uncertainty may not be repaid. Low ratings and high external financing costs are also a weakness.”

take money out of the system

Expressing that every regulation that can be called ‘capital restriction’ in the banking sector may unsettle savers, Prof. Dr. Şenol Babuşcu said: “Applications that leave the free market economy and lead to capital control step by step they make savers take money out of the banking system”.