BusinessCitizens sink while getting into debt – paraanaliz

April 15, 2021710 min

Citizens’ credit debt to banks was only TL 6.3 billion in 2002. In 2007, this debt was TL 94 billion. For 2016, credit debt, which exceeded 420 billion TL, has more than doubled in the last four years and closed the end of 2020 at the level of 821 billion TL. In the first quarter of 2021, it has risen to TL 846 billion.

Citizens borrowed TL 25 billion in three months of 2021

Despite the increase in interest rates in the first three months of 2021, the debt has increased by another TL 25 billion. With the slowdown of home loans and installment payments in the first three months of 2021, loans from TL 278.3 billion would be reduced by TL 2.4 billion to TL 276.9 billion. The abnormal rise in vehicle prices due to the 2021 pandemic also spurred vehicle loans. Vehicle loans, which were TL 11.8 billion at the end of 2020, increased to TL 13.6 billion at the beginning of April. Despite the increase in interest rates, it was observed that the use of Consumer Credits continued. Consumer loans, which closed at the end of 2020 with a volume of TL 385.8 billion, increased by TL 15.4 billion in the first three months of 2021 and reached the level of TL 401.2 billion. TL. Total consumer loans increased by TL 15.8 billion from TL 675.9 billion in the first three months to TL 691.7 billion. Credit card debt, which closed the end of 2020 with a volume of TL 145.1 billion, reached TL 154.7 billion with an increase of TL 9.6 billion. Consumer loans and credit card debt also reached a volume of TL 846.4 billion with an increase of TL 25.4 billion from TL 821 billion in three months. At the end of 2018, Total Debt was TL 505 billion, increasing by 67.6% and reaching TL 846.4 billion. Compared to the end of 2019, indebtedness has increased by 45.9%. In short, the citizen has entered a spiral of indebtedness by closing the debt with debt.

Follow-ups are decreasing, but loan provisions are increasing!

Bank records have been turned so that if there are CEOs who know how many actual bad loans are in their bank, I will kiss their hand. Typically, as credit monitoring rates increase, so do banks’ provisioning rates. However, there has been an anomaly in these indicators in recent years. For example; While the NPL, which was TL 150.9 billion at the end of 2020, decreased by -1.2% at the beginning of April 2021 to TL 149.1 billion; Provisions for doubtful loans increased by 5.8% from TL 108.6 billion to TL 114.9 billion. Furthermore, this provision increase occurred when İŞ BANK sold its TL 745 million NPL from its NPL and was subtracted from the sector’s total NPL in March.

What does this mean? This means that follow-ups are decreasing, but problem loans are increasing, potential follow-ups are being swept under the rug in rough terms. Furthermore, despite the weakening and improvements made in bank provisions, there is an increase in provisions. So let’s keep asking, the question is: Why are supplies increasing?

Why are supplies increasing?

There are several factors in increasing responses. Since the responses increase while the following ones decrease, it means that it is not just a follow-up thing. So, let’s list the main factors.

First; Problem loans are often structured with grace periods. In this way, the loans that need to be followed are floated, more precisely, they are put under the rug for now and the follow-ups are postponed. We can’t go backwards like transferring it to another company like Türk Telekom, showing the loans from that company, and taking the bank off balance.

TURKEY BANKING ASSOCIATION – 2019 BAT announced a £ 35 billion credit that it will set up between October and February 2021. In fact, these 35 billion potential TL trace files are at the same time. Those who say how beautifully tracking rates are dropping are the ones who miss out on the little details. In the Public Banks the monitoring rates are half of those of the national and foreign private banks. If you think that this is because the loans of the public banks are healthier, I say “you don’t know the sector at all.”

Second, the Big Four (GS, FB, BJK, TS) scored a good goal for the banks. The big four loans of 8.5 billion Turkish liras were structured up to 9 years with no principal payment for 2 years. Do You Have Bad Loans Live Loans?

In third place; A significant part of the non-performing loans were taken under the KGF Guarantee and provision rates were indirectly reduced. So much so that 9% of business loans were taken under the KGF umbrella. It was not enough, we learned that the pandemic public personal loans granted in the summer of 2020 were also granted with the KGF Guarantee. The KGF Guarantee ratio in Personal Loans has increased to 10.1%. Have banks shown potential delinquent loans with follow-up potential on live loans with KGF Life Water? Make no mistake, yes.

We will discuss the follow-up issue in another article. While tracking rates were decreasing, even if it was the period when supplies increased, we had accumulated dirt under the carpet! Don’t say “Don’t hit the carpet”, it will be dust and smoke!

Erol TAŞDELEN – Economist www.bankavitrini.com author of

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