İş Bankası made TL 2.21 billion in the first three quarters of the year, while Garanti and Vakıfbank made TL 2.1 billion and TL 940 million, respectively. İş Bankası CEO Ersin Özince noted that these profits would continue into the new year, stating that “according to the data, banks will experience profits in the new year similar to those of the second half of this year. Profits will fall by a bit, but they will not disappear completely.”
At a tree planting ceremony at the İş Bankası Memorial Forest in Antalya, Özince answered questions from the press regarding the third quarter financial statements of banks. Özince stated that these profits helped banks dealing with non-performing loans and therefore made it easier to make loans. Regarding the fall in interest rates this year, Özince highlighted that institutions with strong positions, including banks, would make high profits due to the low interest rates. “Those who have invested in TL-based assets are making money and will continue to do so. There is, however, a misconception that only banks are making money. This is simply untrue.”
The CEO also underlined that accusations that banks were not giving credit because of the low interest rates were provocative statements, and said, “We don’t have the luxury of not giving loans.” He continued by stating that İş Bankası had adopted a long-term strategy that included risky loans, and that even with the non-performing loans originating from individuals and small businesses, the banking sector did not limit the amount of credit in the market. He said: “There was a TL 7 billion to TL 8 billion decrease in international sources of credit. The credit-deposit ratio decreased from 83 percent at the end of 2008 to 81 percent. So the banking sector did not narrow credit lines to the real sector.”
Regarding the 2010 expectations for the banking sector, Özince revealed that “profits may shrink because we don’t have a macroeconomic situation that allows for savings. 2010 revenues may not be as strong as this year’s and expenses may increase. Today, the whole world is saying, ‘If you are going to take any precautions, it’s best to do it now when business is going well’.” Özince continued by stating that the Turkish economy “speeds up and slows down very quickly. So if we have a favorable environment, then the banking sector’s profits will continue to accrue.”
When reminded about the double-taxation agreements that Turkey has with Switzerland and Luxembourg, Özince underlined that “these types of agreements are needed with all countries. For the problem of tax fraud to be solved, social government fundamentals need to be in place.”
