Banks likely to loosen business loan lending standards

Turkish lenders are likely to ease lending standards on loans to enterprises in the first quarter of 2024, a Central Bank survey has shown.

In the last quarter of 2023, the tightening trend ended in the standards that lenders apply to the loans they provide to businesses, the bank said.

"The tightening in the standards on loans to large enterprises and foreign currency loans and continued at a weakening pace, the tightening in the standards on loans to other businesses came to an end."

In the first quarter of 2024, the tightening in housing loan standards will weaken further, while the standards on individual loans will tighten somewhat, according to the survey.

Banks expect the tightening in the standards on vehicle loans to continue at a low level in the first three months of the year.

Demand for business loans will remain very weak, banks anticipated.

The downward trend in housing loan demand will weaken further, according to the survey of banks.

In the first 11 months of 2023, mortgaged home sales plunged nearly 34 percent from a year ago to 172,000 units, while total home sales fell 15 percent to around 1.1 million.

Surveyed banks expect a significant decline in demand for car loans in the first quarter of 2024.

The tightening in local funding conditions and the loosening in the funding conditions in the international markets are likely to continue in the first quarter of 2024, according to the lenders.

The simplification of macroprudential regulations, particularly the removal of the soft interest rate cap on commercial loans, supported Turkish banks' margins, Fitch Ratings said in a report in December last year.

The data from the Banking Regulation and Supervision Agency (BDDK)...

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