Turkish Bank Earnings to Reveal More Scars of a Battered Economy
- Lenders battered by rising bad debts as funding costs jump
- Weak lending activity seen extending into next few quarters
Customers queue outside automated teller machines in Istanbul.
Photographer: Kerim Okten/Bloomberg
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Turkish banking stocks are on course for their worst year in a decade -- and third-quarter earnings reports starting this week will show why.
Spiraling inflation, a surge in interest rates and a plunge in the lira amid tensions with the U.S. are battering the economy. Companies and individuals are finding it harder to repay their loans, causing bad debts to swell and eating into earnings as lenders increase provisions and bolster capital buffers to brace for more defaults.