Turkey: February Job Report
Labor market data for February 2016 was released early this week. The unemployment rate was down 20 basis points on monthly basis to 10.9% according to the official figures. The employment rate also saw a pick-up and stood at 45.3% while workforce participation rate was 10 basis points higher at 45.3% compared to January. In non-adjusted terms, Turkish economy added 181K jobs of which 117K was in non-farm industries. However, manufacturing jobs decreased by...
Bad Loans Soar at Turkish Banks
Bad loans in Turkey soared 3.6% m/m in January caused concerns rising around the asset quality in the financial sector. Even worse, annual change was 32.6% which was the highest figure recorded in six years. That being said, total NPLs in Turkish banking universe rose to TRY 49.2 billion which accounted for 3.18% of total loan portfolio of the sector with an increase of 9 basis points from December 2015. This was also the highest NPL ratio ever recorded since...
Turkish Banks: Solvent but Illiquid?
One of the major roles of banks is to channel funds from savings into valuable projects. In doing so, banks engage in liquidity and maturity transformation, since they finance long-term, illiquid project while funding themselves with short-term, liquid abilities. By performing this important role, banks expose themselves to the risk of runs.
Turkish banks have become far more active in the international loan markets, giving international banks exposure to the both financial institution sector. But with huge...