Turkish banking sector continues to exhibit robust capital structure despite ongoing fluctuations in profitability


(MENAFN) The Turkish banking sector continues to exhibit a robust capital structure despite ongoing fluctuations in profitability, according to Francis Malige, the financial institutions managing director at the European bank for Reconstruction and Development (EBRD). In a recent statement to Anadolu, Malige emphasized the EBRD’s enduring partnerships with Turkish banks, noting a recent uptick in agreements signed with them.

As of now, EBRD's investments in the Turkish financial sector amount to EUR600 million (approximately USD668.6 million), with plans to continue these investments through the end of the year. Last year alone, the EBRD invested a total of USD2.8 billion in the Turkish economy, with USD1.3 billion specifically allocated to the finance sector.

Malige pointed out that Turkey's economy is gradually recovering from a period of high inflation, demonstrating strong performance indicators. He noted that the banking sector boasts significant liquidity buffers, which provide a cushion against potential shocks. However, he acknowledged the challenges posed by the current high interest rate environment, which has introduced instability.

With a return to more stable macroeconomic policies, Malige expressed optimism that Turkish banks can navigate these challenges effectively. He stated, “I’m not concerned about the profitability of the banks; my main concern was for them to focus on financing their clients rather than turning inwards.” This approach is essential for ensuring the continued strength and capitalization of banks in the sector.

Furthermore, Malige highlighted that over the past year, the implementation of orthodox macroeconomic policies has resulted in significant improvements in the financial landscape. The EBRD remains committed to supporting Turkish banks and facilitating their role in fostering economic growth through enhanced client financing and stability. As the Turkish banking sector adapts to evolving economic conditions, it is poised to leverage its strong capital base to foster resilience and growth in the coming years.

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