Turkey’s Halkbank sells non-performing loans worth $12.5 million to state-run TMSF

Turkey’s state-owned Halkbank has sold non-performing loans worth 76.7 million lira (about $12.5 million) for 4.5 million lira (about $732,940) to the Savings Deposit Insurance Fund (TMSF), Diken news site reported on Friday. 

The Bank announced that part of its receivables constituting 76,685,144 lira of the bank’s non-performing portfolio had been assigned and transferred on Friday to Birleşim Varlık Yönetim A.Ş. owned by the TMSF, Turkish state’s fund and insurance management body.

Turkey’s banks are faced with mounting non-performing loans resulting from lira’s slide this year and the consequent interest rate hikes.

Bloomberg reported last month that Turkish government planned to transfer non-performing loans to a state designated entity; a measure that was expected to be included in the New Economic Programme  (NEP) unveiled the same month. 

The NEP instead promised a full assessment of banks’ balance sheets and financial help for lenders in need and the head of Turkey’s banking regulator announced on Sept. 20 that Turkey had no plans to transfer the bad debts of banks to another institution.

Credit rating agency Fitch on Oct. 2 downgraded 20 Turkish banks, including Halkbank, saying Turkish lenders were more likely to face pressure on their performance, asset quality, capitalisation and liquidity and funding profiles.