By Tuba Sahin
ANKARA (AA) – Turkish banking sector gives solid signals for 2020s, the global audit and consultancy firm KPMG said on Monday.
The sector will focus on maintaining its strong asset quality, the KPMG said in a statement.
Total assets of Turkey's banking sector amounted to 4.3 trillion Turkish liras ($758.97 billion) in January-October, rising by 8.3% year-on-year, according to the latest data from the Banking Regulation and Supervision Agency.
Turkish economy showed a better performance than expected despite political tensions in 2019 and international pressure due to Turkey’s anti-terror operation in northern Syria, it said.
Next year the recovery process will speed up, the KPMG report underlined.
"The banks will focus on the growth process through meeting demands along with managing their non-performing loans and maintaining asset quality in 2020," it said.
While the risks on the economy, which recovered from recession in 2019 and maintained its stabilizing steps, did not diminish, its fragility decreased, read the statement.
Digital transformation is at the top of the agenda of the sector, the KPMG said, and underlined that banks continue to allocate more investment expenditures and budgets to improve their digital channels.
"This is the evidence of the magnitude of appetite and that growth in this area will not slow down in the short term," it said.
KPMG partner Kerem Vardar said renewed syndicated loans at a cost of nearly 50 basis points less than previous year stand out as one of the most important indicators of the recovery process.
"As the banking sector plays a critical role in the recovery of economic activities by its nature, the improvement of the conditions here becomes apparent as one of the cornerstones of the betterment in the country's economy," Vardar said.
He underscored that as risk appetite starts to increase again, supporting economic activity to meet deferred demands will make a significant contribution to profitability.