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Govt Eyes Captial Injections Into Beleaguered State Banks Ahead of New Credit Push

TURKEY

LOCAL NEWS

  • Govt considering injecting capital into state run banks after they led a lending splurge to businesses and lenders last year.
    • Halkbank, Ziraat Bank & Vafibank have depleted their finances and are also saddled wit bad debt making the injection necessary.
    • Authorities want banks to prepare for another burst of credit from construction & other borrowers.
    • Govt remains undecided on the size of the injection or a solution for unpaid loans not yet classified as NPLs.
    • Shifting loans to one or more asset management company or "bad bank" remains an option. Senior banker warns "the NPL forbearance cannot go on forever, we have to face reality" – RTRS, Ahval*
  • Erdogan replaces head of state run asset management firm TMSF, hiring Fatin Rustu Karakas as the replacement (AUM EUR7.5bn).
    • Karakas is the former CEO of Sekerbank and has served on the board of Turkey's banking regulator.
    • In April the EU said the TMSF acted as a disruptive influence on the smooth running of a free market with acquisition and management of companies remaining non-transparent
  • Turkey, US Defense Ministers continued "constructive" talks over the Kabul airport on Thursday. However, no major developments have come from the meetings held from Wednesday
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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