THE KURDISH COMMUNITY IN LEBANON - American University of Beirut
Economy and Banking Sector in Turkey Beirut, Lebanon December, 2010.
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Transcript of Economy and Banking Sector in Turkey Beirut, Lebanon December, 2010.
Economy and Banking Sectorin Turkey
Beirut, Lebanon December, 2010
2
Content
I.Main features of and recent performance of the Turkish economy
II. Banking sector
III. Near-term expectations
3
Main features and performance of the
Turkish economy
4
• Turkey Turkey has has a a functioning functioning marketmarket economy economy,, capital flows are capital flows are free free and and there is no exchange rate restriction for residents and non-residents there is no exchange rate restriction for residents and non-residents
• Current exchange rate regime is a Current exchange rate regime is a floating systemfloating system
• The Central Bank has been implementing a The Central Bank has been implementing a formal inflation-targeting formal inflation-targeting frameworkframework
• Sovereign credit rating, currently is Sovereign credit rating, currently is BBBB “with stable comment” “with stable comment”
• Services Services and industry have shares of and industry have shares of 60 percent60 percent and and 30 percent30 percent, , respectively.respectively.
• Long term average growth rate is about Long term average growth rate is about 4,54,5 percent percent..
5
• GNP is about USD GNP is about USD 730730 billion, billion, 1166th largest in the worldth largest in the world, , 6th6th in the EU; in the EU; 2nd2nd in the region after Russia. in the region after Russia.
• In terms of total assets of banks, Turkey is ranked the In terms of total assets of banks, Turkey is ranked the 15th15th in the EU. in the EU.
• Member of Member of G-20 countriesG-20 countries
• Income per capita is around Income per capita is around USD 10,000USD 10,000
• Foreign trade volume to GForeign trade volume to GDDP isP is about about 45 percent.45 percent.
• Almost Almost half of Turkey's total tradehalf of Turkey's total trade is with the EU. is with the EU.
• Population is about Population is about 72 million72 million in which the group of in which the group of 15-64 age15-64 age has a has a share of 65 percent. share of 65 percent.
• Unemployment rateUnemployment rate is aboutis about 1111 percentpercent, recently., recently.
Savings gap; around 5% of Gdp
6
Savings and investment balance (As % of Gdp)
-12-10-8-6-4-202468
101214
02 03 04 05 06 07 08 09 10exp
11 t 12 t 13 t
Balance Public sector Private sector
Quick recovery and stable growth in Gdp
7
GDP growth (%)
-6
-4
-2
0
2
4
6
8
10
12
02 03 04 05 06 07 08 09 10exp
11 t 12 t 13 t
8
Steady increase in income per capita
Income per capita (USD)
3.0004.000
5.0006.000
7.0008.000
9.00010.000
11.00012.000
13.000
02 03 04 05 06 07 08 09 10exp
11 t 12 t 13 t
Net capital inflow; change in structure with increasing volume to TL financial assets
9
Net capital flows (USD billion)
-20
-10
0
10
20
30
40
50
60
02 03 04 05 06 07 08 09 10 Spt
Non-financials FDIPortfolio investments FinancialsDeposits
10
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 (%)
10
20
30
40
50
60
70
80
90
02 03 04 05 06 07 08 09 10 Spt
100
110
120
130
140
150
160
170
180
Fx reserves Ratio
Rapid disinflation: inflation has declined to the historically lowest level during the free market economy.
11
Inflation (annual, %)
0
5
10
15
20
25
30
35
02 03 04 05 06 07 08 09 10exp
11 t 12 t 13 t
12
TL remained rather stable against major currencies as policy rate fell steadily
TL/(0,5(USD+Euro)), CB policy rate (%)
1,4
1,5
1,6
1,7
1,8
1,9
02 03 04 05 06 07 08 09 10 Nov
0
10
20
30
40
50
TL/(USD+Euro) Policy rate (right)
Public sector borrowing requirement is about 3% of Gdp
13
Public sector balance (as % of GDP)
-12
-10
-8
-6
-4
-2
0
2
4
02 03 04 05 06 07 08 09 10exp
11 t 12 t 13 t
Government’s demand from the financial sector
14
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
Demand for financial assets
15
Financial assets(As % of Gdp) 2010 Spt
Money and deposits 52
Securities (market capitilization) 44
G.securities 33
Investment funds 2
Total 131 TL 116 Fx 15
16
Banking sector
17
18
“Turkish banking sector has shown remarkable resilience to the global crisis”
No “high risky” assetsSmall investments in housing financingWell-diversified lending portfolio, mainly to private sector andG-securitiesHigh-capital adequacy level with 20%High-liquidity levelNo change in deposit-quaranty limit, current level is USD 33,000No financial support form the GovernmentBanking sector has kept financing economic activities Increase in NPLs2009 and 2010, have been the profitable years
Selected items
19
Banks in TurkeySelected indicatorsAs of September, 2010 Deposit banks Investment and Participation Total
banks development b banks
Number of banks 33 12 4 49
Numer of branches 9.294 44 533 9.871
Employment 171.957 5.394 11.442 188.793
Selected items
20
Banks in TurkeySelected indicatorsAs of September, 2010 Deposit banks Investment and Participation TotalUSD billion banks development b banks
Assets 595 19 28 642Loans 302 10 17 329Deposits 376 0 21 397Shareholders equity 75 9 4 88
21
Foreign owned banks’ share
Ownership structure (%)Free flot Non residents' share* Non residents' share*
Shareholders' equity Total assets
2002 5,4 3,22009 19,5 24,5 23,02010 June 19,7 21,7 20,7
*weighted share in non-public shares
22
The largest ten banks account for 87% of total assets
Concentration ratio% 02 10 JuneLargest five* Assets 58 63 Deposits 61 66 Loans 55 57Largest ten* Assets 81 87 Deposits 86 91 Loans 74 85* According to total assets
23
Rapid growth in banking sector
Total assets (dep+inv banks)
100
200
300
400
500
600
700
02 03 04 05 06 07 08 09 10 Spt
USD billion
505560657075808590
%
Total assets As % of GDP (right)
24
Rapid rise in lending
Selected balance sheet itemsAs % of Gdp 2002 2010 Spt
Securities portfolio 25 26 TL 15 22Total loans 15 43 TL 7 32 Fx 8 12Total assets 61 85 TL 34 63 Fx 26 222010 GDP estimated
25
Deposits account for more than half of the liabilities
Selected balance sheet itemsAs % of Gdp 2002 2010 Spt
Deposits 39 52 TL 17 36 Fx 23 16Non-deposit source 10 15Shareholders' equity 7 12Total liabilities 61 85 TL 30 59 Fx 31 262010 GDP estimated
Stronger shareholders’ capital and free capital enabled the banking sector to change its risk structure...
26
Shareholders' equity, free capital (USD billion) and Capital adequacy ratio (%)
0
20
40
60
80
100
02 09 Dec 10 Spt
0
5
10
15
20
25
30
Shareholders' equity Free capital CA (right)
Banks continued to finance economy ...
27
Loans ( USD billion) 2002 2010 Spt
Total loans 32 317
Corporates 28 209
SMEs 0 69
Consumers 4 108
Securities portfolio 52 190
Deposit, development and investment banks
Lending to consumer’s share has risen in total
28
Breakdown of total loans(%) 2002 2010 Spt
Corporates 87 66
SMEs 22
Consumer+credit cards 13 34
Consumer 4 25
Housing 1 11
Automobile 1 1
Others 2 13
Credit cards 8 9
Total 100 100
*Deposits, investment and development banks
NPLs began to decline in 2010
29
NPLs*(%) 26.12.2008 31.12.2009 28.10.2010
Total (before provisions) 3,6 5,7 4,4Total (after provisions) 0,7 1,0 0,6Provisions for NPLs 80,8 82,9 85,4
Cosumer loans 2,3 4,3 3,1Credit cards 7,2 11,6 9,7Corporate 3,6 5,3 4,2 SMEs 5,3 8,4 5,9
* Deposits, investment and development banks
30
ROE has reached the record in 2009
Real return on shareholders' equity (Annual, adjusted by consumer inflation %)
-20
-15
-10
-5
0
5
10
15
02 03 04 05 06 07 08 09 10 Spt
31
Financial institutions have a share of 40 percent in the total market capitilization
Market capitilization of financial institutions
0
25
50
75
100
125
02 03 04 05 06 07 08 09 10 Oct
20
25
30
35
40
45
Market cap. (USD billion)
Share in the total market cap.(%, right)
32
Compared with the international figures
EU-TurkeySelected indicators, 2009
EU TR
Income per capita Euro 23.578 6.134Bank assets per capita Euro 84.234 5.395Loans per capita Euro 38.247 2.540Assets/Gdp % 357 88Loans/Gdp % 162 42Consumer loans/Gdp % 8 9Housing loans/Gdp % 43 5
33
Sustainable growth led by private sector
Near-term expectations 2006-2010 2011 2012 2013average
GDP growth % 2,7 4,5 5,0 5,5Income per capita USD 9.174 10.624 11.405 12.157Inflation y-o-y, % 8,5 5,3 5,0 4,9PSBR As % GDP 1,8 2,1 1,8 1,2Public sector debt As % GDP 43 41 39 37Current account balance As % GDP -5,0 -5,4 -5,0 -4,9Unemployment rate % 11,2 12 11,7 11,4
The Government programme target
34
Thank you.