Bankers' biggest challenge now is to persuade businesspeople to take out loans, given that the lack of demand growth prospects is dampening any investment plan, says Omer Tetik, first vice-president of Credit Europe Bank, a domestic medium-sized bank, part of the financial group controlled by Turkish businessman Husnu Ozyegin.
On the other hand, Tetik says the retail segment is now perceived as quite risky, as redundancy programmes have not been halted.
"High school teachers are the best payers. But how can you lend to them, when you don't know if they are to be laid off," Credit Europe Bank manager wonders, considering the state is still delaying implementing expense reduction plans though it is ever more clear tough cost cuts cannot be avoided.
In the absence of funding to support consumer spending, firms do not have anybody to produce for, either, but all clients are now more wary in taking out loans after the 2008-2009 shock, when interest rates soared and banks almost completely froze lending.
"We have cash and we want to grant loans, but good clients are highly reluctant. Firms with a sound financial situation are putting off investments, and individual clients are waiting for prices to go down some more," Tetik says. He says in the case of Credit Europe 20% of assets are placed in liquid instruments (either on the inter-bank market, or in bonds i.e.), but the situation is similar on the entire market.
However, for 2010, the Turkish bank plans to boost the volume of loans by 15%-20%, which would, however, mean a little more than recouping the 2009 decline. "We ended last year with a loan volume of 900m euros. In 2009, we sold a mortgage loan package worth 360m euros to the parent company in the Netherlands. Without the impact of this transaction, the volume would have dropped by 15%, because sales were weak across all lines," Tetik
