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Islamic Finance

Turkey’s Islamic banks profits rise 8.2 pct H1 2019 year-on-year, market share up 7.5 pct


The net profit of Turkey’s Islamic banks jumped 8.2 per cent to 1.249 billion liras ($224 million) in June from 1.154 billion liras for the same month last year, according to data from the banking regulator BDDK.

The Shariah-compliant banks out-performed the overall banking sector, whose net profit dropped 14.6 per cent to 24.776 billion liras in June compared to 29.018 billion liras in the same month in 2018.

BIGGER MARKET SHARE

The participation banks, as Islamic banks are called in Turkey, increased their market share by 7.5 per cent to reach 5.7 per cent of total banking assets in June compared to 5.3 per cent at the end of 2018.

The six participation banks held 240 billion liras ($43 billion) in assets in June, up 15.8 per cent from the end of 2018.

Assets of the overall banking sector, including participation banks, grew a slower 9.5 per cent to 4.2 trillion liras for the first half of 2019.

BAD LOANS RATIO WORSENS

Islamic deposits reached 172.708 million liras in June this year compared to 123.712 million liras for the same month in 2018, equivalent to a 39.6 per cent rise.

Financing grew 11.9 per cent from 111.060 million liras in June 2018 to 124.243 million liras in June 2019.

However, the Islamic sector’s gross non-performing financing (NPF) ratio worsened to 4.66 per cent in June from 4.55 per cent a month earlier. It was 3.39 per cent in June of 2018.

Participation banks’ NPFs were higher than the overall banking sector’s non-performing loans (NPL) of 4.36 per cent in June and 4.18 per cent a month earlier.

Turkey welcomed its sixth participation bank, Emlak, earlier this year. The five other Islamic banks are Albaraka Turk, Kuveyt Turk, Turkiye Finans, Ziraat, and Vakif.

($1 = 5.5812 Turkish liras)

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