Birol BOZKURT
A senior banker said that private banks are eager to provide loans, adding that due to rising credit costs, companies are cashing out their own resources, namely deposits, instead of taking out loans.
The banking source, who said that the number of companies that have given up on taking out 60 percent costly loans by using their 45-50 percent yielding deposits, is increasing day by day, said: “The main reason why total deposits have started to decrease in recent weeks is because companies have started to cash out their deposits. We also estimate that the money coming from KKM will be used to manage credit costs with the end of the tax advantage in July. Previously, companies were eager to convert their Foreign Exchange Convertible Deposits (DDM) into TL deposits, but this interest has decreased recently due to the need for financing.”
The decline in deposits continues
While the credit volume in the banking sector continues to grow, the decline in deposits continues. According to Banking Regulation and Supervision (BDDK) data, the size of total deposits, which rose to an all-time high of 16 trillion 493 billion 105 million TL in the week of June 21, began to decline in the following two weeks, falling to 16 trillion 198 billion 904 million TL last week. The credit volume of the banking sector increased by 35 billion 294 million TL in the week of July 5, reaching 13 trillion 838 billion 499 million TL.
The decline in deposits was driven by the fact that commercial institutions began to liquidate their deposits in the last two weeks. Companies that wanted to manage cash flow but did not want to bear the cost of credit began to liquidate the deposits they held as equity assets in banks. According to BDDK data, the total deposits of commercial institutions, which were 5 trillion 477 billion lira on June 21, decreased to 5 trillion 205 billion lira in the week of July 5.
“A company that cannot manage its cash flow will be out of the game”
We sought the opinions of banking sources regarding the recently announced banking data. A banker stated that the course of inflation continues in line with the expectations of the Central Bank, and that difficulties have begun for companies, and said the following; “The economy has two aspects; the fight against inflation that will ensure price stability, and the other is more macroeconomic indicators that affect the growth of companies.
Companies should do their pricing very well, those who do it wrong may face a serious cash flow problem and fall out of the game. Those who do this will continue to play, while those who get scared and set their prices high will face a very serious cash flow problem and leave the game. The economic downturn has begun and will continue until the end of 2025.”
The decline in deposit accounts continued
The total deposits of the banking sector decreased by 249.1 billion liras in the week ending July 5 compared to the previous week and fell to 16 trillion 751 billion 447 million liras. In the same period, TL deposits in banks decreased by 1.95 percent to 9 trillion 992 billion liras, while foreign currency (FX) deposits decreased by 1.48 percent to 5 trillion 946 billion liras. While total FX deposits in banks amounted to 193 billion dollars last week, 162.5 billion dollars of this amount was collected in the accounts of domestic residents. When the data adjusted for the parity effect is taken into account, a decrease of 1 billion 681 million dollars was observed in total FX deposits of domestic residents as of July 5.
Source: www.dunya.com
