March 2, 2020 / 12:45 PM / 3 months ago

Turkish banking sector January net profit up 147%- watchdog

ISTANBUL, March 2 (Reuters) - Turkey’s banking sector recorded a net profit of 7.9 billion lira in January, rising 147% year-on-year, the BDDK banking watchdog said on Monday.

The non-performing loan (NPLs) ratio stood at 5.34% at the end of January, the watchdog data showed.

Turkish lira lost some 30% of its value in 2018 after a currency crisis, leaving many companies unable to service foreign-currency debt that weighed on lenders’ balance sheets.

In November, the banking watchdog changed loan classification regulations and instructed banks to write off some loans to clean up bad debt following the currency crisis.

The government encouraged banks to lend more to spur economic activity as domestic demand started to pick up with interest rates and inflation falling last year but some banks have hesitated to lend and focused on restructuring their portfolio.

The banking sector increased its loan portfolio by 13% in January year-on-year, reaching 2.68 trillion lira, according to BDDK data. (Reporting by Ebru Tuncay Writing by Ezgi Erkoyun Editing by Daren Butler)

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