Professor Warns State Banks May Need Funding to Offset Declining Profitability

LOCAL NEWS

• Professor warns State banks may need taxpayer funding to meet losses from cheap lending and high interest rates on deposits.
  • Notes Treasury capital transfers may soon be required if banks' profits diminish further: profits declined 77.4% to TRY1.36bn in the first 4 months of the year.
  • Former CBRT chief economist Sozcu says issues in the banking sector will persists as long as govt pursues populist policies without battling inflation
• 15 AKP MPs push for Interior Minister Soylu's resignation over organized crime allegations – Duvar
• Macron says he wats to meet with Erdogan despite 'profound disagreements' just before the NATO Summit (14 June).
  • Noted, however, that Turkey's purchase of S-400s is an issue within NATO. Despite this, Macros said he wished to tell Erdogan that France's struggle does not target Islam in any way
• Experts warn the $25bn Canal Istanbul project increases the risk from earthquakes. Notes Istanbul is also at risk of a strong earthquake in the near future that could cut it off from the mainland as the canal would turn Istanbul into an island.
  • Erdogan says groundwork for the canal will be laid by month-end. Survey shows most locals oppose the plan
• World Bank Revises Turkey's growth forecast upwards by 0.5% to 5% for 2021 as exports benefit from firming external demand, particularly in the Euro area.
  • Noted the forecast masks growing vulnerabilities: reoccurring covid outbreaks, weak tourism, tightening of external financing conditions, rise in policy uncertainty, especially in monetary policy