Against this backdrop, the area’s lending activity has remained fairly stable over the last twelve months and in the quarter (up 0.6% and 0.3%, respectively). By businesses:
- There has been a decrease in the balance of the wholesale portfolios in the region (down 9.6% year-on-year), although it was much less steep than in previous quarters. In fact, the volume remained practically stable over the quarter (down 0.2%).
- Lending continued to perform favorably in the retail segments, although in Garanti Bank the growth rate was somewhat lower than in 2013, given that both Turkish businesses and consumers have postponed their purchase decisions due to the political and economic uncertainty of the last few months. Turkish lira-denominated loans are up 2.7% over the quarter, a figure similar to that for the sector as a whole, while foreign-currency loans have increased by 0.5%, also in line with the rest of the industry.
Asset quality remains practically stable compared with the figures for the close of 2013, in terms of both NPA and coverage ratios. Improvement in the risk premium, which ended the quarter at 0.67% (1.11% accumulated as of 2013).
Customer deposits under management have performed well and maintained their volume:
- With wholesale customers (up 18.1% year-on-year), a segment where the commercial gap fell once again.
- And with retail customers (up 9.3%). Faced with the rising cost of Turkish lira-denominated deposits, Garanti Bank has opted to increase its foreign-currency funding. These deposits have grown over the quarter by 12.1% (up 9% in the sector in the same period) and gained around 30 basis points in market share over the last three months. In contrast, Turkish lira-denominated customer funds have declined 7.0% since December 2013, slightly less than for the sector as a whole (down 4.0%).
