Banks benefit from Erdogan’s insistence on interest rate, earnings skyrocket

According to the forecast of analysts participating in the Bloomberg survey, Turkish banks will announce a record level of earnings in the first quarter of the year. The amount of earnings can be up to four times higher than in the same period last year. Halkbank, the state-owned bank, can report an increase in earnings of more than 3000 percent.

The fact the Central Bank reduce interest rates despite the highest inflation in the last 20 years, was effective on these results. Rate-cutting decisions of the Central Bank (MB), the president and managers of which were often replaced (by the President), came after the insistence of President Erdogan. MB had ended this process effective January, after a 500 basis point rate cut between September and December, that triggered the exchange rate crisis.

The gap between inflation and interest rates, caused banks to set records. Economists interpret the distribution of loans from 27 percent of banks financed by the Central Bank with 14 percent as a transfer of wealth from the Treasury, when official inflation was 61 percent.

Increase in volume of loans of banks indicates cheap loans very much loved by market

According to a Bloomberg survey, a 380 percent increase in VAKIFBANK’s net income for the first quarter can be reported. Referring to Halkbank, it may even exceed 3000 percent with this base effect.

SOURCE: diken.com.tr/erdoganin-faiz-israri-bankalara-yaradi-kazanclar-firladi-halkbank-30a-katlayabilir/