By Ebru Tuncay
ISTANBUL (Reuters) – Turkish banks will pay the rate throughout next year as difficulties remain from the nation’s financial turn-around, the chief executive of loanprovider Isbank stated in an interview, including he anticipates the main bank to start cutting interest rates this November.
CEO Hakan Aran informed Reuters that Turkey’s biggest personal bank by possessions strategies to broaden its footprint in payment system facilities, digital platforms and service banking, where it will make brand-new collaborations and acquisitions abroad.
The development strategy comes as Isbank marks its 100-year anniversary, and as Turkish authorities lookfor to stamp out skyrocketing inflation with high interest rates and other tighteningup steps that have squeezed financial-sector balance sheets.
“I think troubles will likewise continue throughout2025 We all will continue to pay the rate for the sake of guaranteeing cost stability and decreasing inflation,” Aran stated in the interview at Isbank’s Istanbul headoffice.
“Banks will conquer this procedure with a wearandtear in internet interest margin this year, and a degeneration in the possession quality next year.”
Asset quality currently started wearingdown in July, while internet interest margins are under severe pressure, Aran included.
“Banks’ return on equity is reducing. If we were mandated to do ‘inflation accounting’, lotsof banks would mostlikely be reporting losses,” he stated. “Banks appear to be lucrative ideal now because there is no inflation accounting.”
The federalgovernment last year leftout banks from business using inflation-adjusted accounting approaches to their balance sheets over issues it would outcome in tax earnings losses.
Since June last year, the main bank has treked its policy rate to 50% from 8.5% to reverse years of unconventional easy-money policies under President Tayyip Erdogan, who supported the U-turn.
Inflation dipped listedbelow 62% las