S&P Global estimated that by the end of 2021, NPL ratio could be doubled from the current 5% to 11% in Turkey.
The institution stated that the non-performing loan rate, including structured loans, may exceed 20%.
“Greater risk aversion by international investors can affect banks’ ability to roll over their external debt,” S&P said. Domestic depositors can direct their savings m-more and more to foreign currency, which may increase the pressure on the banking sector. ”
The S&P Global expects Turkey’s 2020 GDP to shrink by 2.5% and forecasts 4% growth for 2021. In its base case scenario, S&P predicts loan growth to slow in the remainder of 2020 and float at close to 5% in 2021.