Corporate banking grew by 23.5 percent in the first 6 months. The high liquidity demand and strong government support in the epidemic brought growth. ..
This increasing trend is expected to continue in the range of 20-25 percent until the end of the year. Banks such as QNB Finansbank, Odeabank, Kuveyt Türk, Ziraat Participation calculate double digit growth in the second half. With its profitable and fragmented structure, especially SMEs and OBIs are in focus.
Corporate banking left its mark in the first half of 2020. In the first 6 months, corporate, SME, corporate and commercial banking loans grew by 23.5 percent compared to the end of 2019. Growth in retail loans remained at 20 percent in the same period. “Good growth in corporate banking in the first half caught,” said Bain & Company Turkey Financial Institutions Leader Emre Demircan, the momentum of the main factors in particular sums up the rise and described the government stimulus packages of the pandemic period, the company of working capital requirements. As the economy slowed down, the amount of working capital loans companies received from banks increased to cover their expenses. Banking consultant Mehmet Erten attributes the strong growth in corporate banking to two important developments: “Public banks provided strong loans to the real sector with the support of the economy management, especially during the pandemic process. In addition, private banks started to give loans with the effect of their active ratio; especially they went to companies to which they would lend solid and fast. ” Garanti BBVA’s general manager, Recep Baştuğ, reveals this when explaining the first half figures: “The pandemic period was a period of high liquidity demand due to the effect of uncertainty. Liquidity demand came first from large companies. As a result, we recorded a record growth of 28 percent in TL corporate loans in the second quarter. In this area, we made 6.5 billion TL credit within the scope of KGF. ” So, will corporate banking continue to grow in the second half of the year? Which area will stand out for banks in the corporate sector?
TURNED THE ROUTE
On the corporate side, things started well in the first two months of the year, with investment requests postponed before the pandemic. But after the restructuring of loans in all segments, including large companies in particular the announcement of the first case in Turkey in the middle of March, shifting demand it grew like a snowball. During this period, companies that did not want to have liquidity problems knocked on banks’ doors with a loan request. This environment enabled all banks to turn to corporate banking in the first half. While announcing the first half results, İşbank General Manager Adnan Bali said, “We postponed loans over 44 billion TL. In addition to the support packages for tradesmen, small businesses and SMEs, we signed the ‘Exporters Support Protocol’ with TIM for the financing of exports, ”he says. On the public side, Halkbank announced that as of May 21, within the scope of the Economic Stability Shield, it provided a commercial loan support of TL 52.8 billion to tradesmen, SMEs and corporate customers. Stating that “Our commercial banking strategy is to contribute to the financing of foreign trade and grow in TL cash loans”, Odeabank Commercial Banking Deputy General Manager Yalçın Avcı explains that they grew 16 percent in TL cash loans and 32 percent in non-cash loans in the first 6 months compared to the end of 2019. Anadolubank General Manager Namık Ülke explains that they increased their loan volume by 10 percent in the first half, mainly commercial. Higher growths are noteworthy in participation banking. On the legal side, Kuveyt Türk explains that it has reached a financing size of nearly 60 billion TL, with 27 percent growth compared to the same period of the previous year. İkram Göktaş, General Manager of Foundation Participation, said, “We are growing broadly; In the first 6 months, we achieved an increase of 7.5 billion TL in the funds provided by corporate customers ”. Turkey Finance Deputy General Manager Murat evening is “the first half, 31 percent in the commercial and OB segment, we grew 57 percent in the corporate segment,” he says.
HOW IS THE TABLE?
“The sector in TL loans grew by 28 percent in the first 6 months. At the end of the year, we think that the growth in TL loans can reach 35 percent, ”said Garanti BBVA General Manager Recep Baştuğ, in a private interview he gave to Capital in August, and stated that they expect calm on the legal side in the second half. Still, the bank’s targets are “We have to digest the growth we achieved after March in the second half of the year, but there will be positive growth in the second half. As a focus, our priority is the legal party. SMEs and commercial banking are always in the forefront on the corporate side, ”he explained. Consultants are also making statements for the end of 2020 in parallel. Derya Gürerk predicts that the growth of the legal entity will be 25 percent by the end of the year. “As explained, if there is a competitive exchange rate, export-oriented activity will increase in the second half, which again creates growth on the corporate side,” says Gürerk. Global Kapital Group CEO Tunç Akyurt expects a growth of 20-25 percent in SME loans in the second half. Accordingly, SME loans may end the year with a 55-60 percent growth rate. Akyurt comments, “Corporate and commercial loans will gradually grow a little more cautiously, with an increase of 10-15 percent, and a growth of 30-35 percent in total for the year” comments Akyurt. “Loans seem likely to slow down in the rest of the year as interest and exchange rates increase,” said Mehmet Erten, and states that a growth of 20 percent can be seen at the end of the year, especially with the effect of the CBRT rediscount loan. Of course, in the current growth decision, banks first look at the possible change in the bad debt ratio. Bain & Company Turkey Financial Institutions Leader Emre Demircan, “because of the persistence of the epidemic, restructured loans and to show how the performance of translating a refund and an impact on how the question marks on leave issues via bank portfolio quality of the current situation,” he says.
HAVE STRONG GOALS
There are strong targets for the second half of the year in banks, especially small-scale ones focusing on corporate banking rather than individual and participation. Consultants think that large banks that do business in all fields will have a quieter growth trend later in the year. For example Odeabank Turkey, in particular the Middle East and North / Central Africa region, the foreign trade volume of his claim to be a major player. Yalçın Avcı said, “Our priority is to grow in commercial cash and non-cash loans. “We aim to grow between 25-30 percent in the 6-month period compared to the first half.” Anadolubank General Manager Namık Ülke says that they have reorganized their business line in the SME, business and agriculture segments and want to grow by focusing on OBIs. Ece Börü, the new CEO of TSKB, who has grown as much as the exchange rate increase in the first half of the year, said, “We are watching the signs of recovery in June, and we anticipate that the appetite for investment will gain strength in the coming periods. “We have horizontally updated our annual growth target of 3-5 percent for loans after the second quarter.” On the participation side, higher goals are pronounced. Abdurrahman Delipoyraz, Deputy General Manager Responsible for Kuveyt Turk SME Banking, predicts that they will achieve a growth similar to 27 percent in the first half of the year. İkram Göktaş, General Manager of Foundation Participation, explains that they will support renewable energy sources, roof GES and RES projects and expect an increase of 16.5 percent on the legal side. Emlak Katılım aims to increase its asset size by 30 percent in the second half by focusing on local production companies. “We have already reached the target we set for the end of the financial year of the legal banking,” said Turkey’s Finance Deputy General Manager Murat evening, expecting to gain rapid momentum in the continuation of international trade.
SME WILL GO STRONGER
In the first 6 months, SME loans on the corporate side became the banking field with the strongest growth, with 29 percent increase. This BANKING trend is expected to continue in 2020 and 2021. Emre Demircan said, “In the past, we observed that in times of crisis when states did not implement incentive programs, large enterprises that could provide collateral had better access to loans, and SMEs would have had a more difficult period. However, we expect credit support to SMEs to continue, as there is an incentive program in the epidemic. For example, Garanti Bank determines the SME and above-mentioned commercial segment as its focus in the long term, as its growth potential with high penetration is higher with fragmented business. In a special interview he gave to our magazine in June, Halkbank General Manager Osman Arslan said, “Our market share in SME banking in the first quarter is very high, such as 19.4 percent. This year, we will ensure a significant increase in our support for tradesmen and craftsmen, and we aim to increase our loan balance of 41 billion TL by 62 percent to 66.5 billion TL at the end of 2019 ”. Likewise, İkram Göktaş, General Manager of Foundation Participation, said, “We will focus on growth towards small and medium sized SMEs. In this way, we aim to have a structure that is widespread with more bases and touches the customers in different sectors ”. Until the effects of the epidemic diminish in corporate banking, it is thought that there will be no movement in long-term investment loans and project financing. Tunç Akyurt underlines that short-term loans and revolving loans for cash flow rather than long-term products will be popular.
“WE GROW ABOVE THE AVERAGE”
KAAN GÜR / ALTERNATİF BANK GENERAL MANAGER
WE WILL SUPPORTAs a bank, we grew 19 percent in commercial cash loans in the first half of the year compared to the end of December 2019. Our total growth in TL cash loans was 31 percent and non-cash loans increased above 25 percent. In the second half of the year, our priority in corporate banking is to increase the financial support to our corporate customers, to be able to provide services by entering their supplier and dealer network. Here, we are careful to correctly identify the companies that will revive the economic growth that slowed down with the pandemic.
ATTENTION TO FOREIGN TRADE! We predict that we will grow by 5-10 percent in the second half with normalization following the strong growth in corporate banking. In commercial and SME banking, companies active in foreign trade, mainly exports, will be our focus. We have been affected by the contraction in global trade in April and May due to the pandemic, and we believe that foreign trade will gain extra importance for the rest of the year. The extent to which the physical constraints imposed by the pandemic will continue in 2021 is also one of the determining factors for banking. In 2021, we aim to grow above the sector average in corporate banking.
“OUR LEGAL LOCOMOTIVE POWER”
TEMEL GÜZELOĞLU / QNB FINANSBANK GENERAL MANAGER
LEADING AREASIn the first half of 2020, marked by the COVID-19 pandemic, which negatively affected the world, our net loans increased by 11 percent compared to the end of 2019. We continued to grow especially in corporate loans. In our solo balance sheet, our net loans in corporate banking increased by 23.1 percent compared to the first half of 2019 and 14.6 percent compared to the end of 2019. The growth of our loans in corporate and commercial banking by 30 percent was effective in this growth. In the first half of the year, our total restructuring and loan deferral amount since the beginning of March has reached approximately 19.1 billion TL.
CONTINUE ON THE TRAIN Our balance sheet as a solo 5th largest private bank in Turkey bankasıyız. Corporate banking is also the driving force of our growth. We will continue to grow uninterruptedly here. With the further recovery of economic activity in the second half, we aim for a high growth, especially in corporate and commercial activities. On the other hand, we are faced with a health crisis that disrupts the markets. Uncertainties about when the process will normalize and what changes we will encounter in the new period continue.