Türkiye’s banking sector preserves robust capital structure despite some fluctuations
Date
10/1/2024 5:17:23 AM
(MENAFN) Francis Malige, the financial institutions managing director at the European bank for Reconstruction and Development (EBRD), emphasized the Turkish banking sector's robust capital structure despite some fluctuations in bank profitability. He mentioned that the EBRD has a long history of partnerships with Turkish banks, and recently, the number of agreements signed with them has increased. Currently, the EBRD has invested €600 million (approximately USD668.6 million) in the financial sector, with plans to continue its involvement until the end of the year. Last year, the bank's total investments in the Turkish economy reached USD2.8 billion, including USD1.3 billion allocated to the finance sector.
Malige expressed optimism about the Turkish economy's recovery from a period of high inflation, highlighting its strong performance. He noted that the banking sector possesses substantial liquidity buffers, but it still faces challenges, particularly due to instability caused by high interest rates. However, he is confident that, with greater certainty and stable macroeconomic policies, banks can navigate these challenges effectively. His primary concern is for banks to focus on financing their clients rather than their internal issues, which reflects a positive outlook on the sector’s capital strength and partnerships.
He also pointed out that the implementation of orthodox macroeconomic policies over the past year has led to significant improvements in the economy. Malige stressed the importance of maintaining these economic policies, stating that they have garnered confidence from foreign investors and ratings agencies. The consistency of these new policies is crucial for sustaining positive economic sentiment and encouraging further investment.
In addition to financial stability, Malige mentioned the EBRD's commitment to promoting green and digital transformations among small- and medium-sized enterprises in Türkiye. The bank has launched a green economy program worth USD837.2 million, encouraging companies to align with EU regulations, such as the Carbon Border Adjustment Mechanism, to avoid taxes when exporting to the EU. The EBRD has also invested USD669.6 million in southeastern Türkiye, which was impacted by recent earthquakes, focusing on financing for businesses through local banks. The bank continues to collaborate with Turkish financial institutions to assess the ongoing needs of businesses affected by the disaster.
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