5.5 C
Frankfurt am Main

Turkey’s largest state-owned bank records 39 percent profit drop in Q3: report

Must read

Ziraat Bank, Turkey’s largest state-owned lender, said net income in the third quarter dropped by 39 percent year-on-year, the Ahval news website reported on Wednesday.

Profit declined to 1.03 billion lira ($179 million) from 1.69 billion lira in the third quarter of 2018, Ziraat Bank said in a report filed with the İstanbul Stock Exchange late on Tuesday. The decline in quarterly profit outpaced a reduction of 32 percent for the first nine months of the year.

Turkey has used state-run banks to help drive interest rates on loans lower as it sought to stimulate economic growth following last year’s currency crisis. The banks have also helped restructure billions of lira in debt owed by businesses and consumers. Ziraat Bank is controlled by Turkey’s sovereign wealth fund, which is chaired by President Recep Tayyip Erdoğan.

Interest income, net of interest payments, fell by 15 percent to 5.71 billion lira, as an increase in interest earnings from loans lagged that of interest paid to deposit holders.

Interest expenses from deposits rose by 44 percent to 7.42 billion lira, the figures showed. Interest earnings from loans increased 19 percent to 13.75 billion liras.

Outstanding loans at Ziraat Bank contracted by 3.7 percent to 432.2 billion lira in the third quarter compared to the end of June, according to a comparison of the data for the two periods. Foreign currency loans fell by 16 percent to 122.3 billion lira, while Turkish lira loans grew by 2.3 percent to 309.8 billion lira. The lira gained by 2.4 percent during the period, meaning the contraction in foreign currency loans cannot be explained by exchange rate fluctuations alone. Overall loan growth this year was 13.9 percent, the figures showed.

The bank’s losses from derivatives trading more than doubled to 2.15 billion lira, the figures showed. Personnel expenses also climbed by 23 percent to 850.3 billion lira.

More News
Latest News