Dec 19 2017

QNB sees Turkey extending loan guarantee scheme – report

QNB Finansbank, the Turkish unit of Qatar National Bank, expects the government to extend a credit guarantee scheme into next year.

The loan guarantees will probably be increased to 300 billion lira ($78 billion) from the current 200 billion lira, Temel Güzeloğlu, the bank’s chief executive officer, told Bloomberg in an interview published on Tuesday.

“It’s not easy to add more growth on top of this year’s high growth rates,” Güzeloğlu said of the Turkish economy. “Our basic assumption for our 2018 targets is that loans under the Credit Guarantee Fund will be rolled over and loans used under the plan will be raised to 300 billion lira from 200 billion lira.”

The government set a limit of 250 billion lira on the funding when it announced the scheme earlier in 2017 to help stimulate the economy after last year’s coup attempt.

QNB said it would seek wholesale funding to help boost its loan book by 20 percent in 2018, a rate above the estimated industrial average of 15 percent. The funding is needed to “overcome the high loan-to-deposit ratio issue,” Güzeloğlu said.

The loan-to-deposit ratio in Turkey’s banking industry has surged to more than 120 percent from about 85 percent in 2010.