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13 February 2020

Turkish banks rejects fee cuts that may hurt profit

Senior executives from several banks expressed their concerns to Huseyin Aydin, the Head of the Banks Association of Turkey and the country’s largest state-run lender Ziraat Bankasi

Banks officials said that both measures will lower revenue and ultimately hit profitability/Bloomberg

by Bloomberg

Turkish lenders called on the banking association to raise their concerns to the government over recent fee cuts, saying the measures will hurt profitability and financing.

The officials met after the government unveiled measures to press lenders to focus on expanding credit by lowering and even eliminating fees earned on customer transactions.

The changes, which will leave banks with only a handful of commissions they can charge commercial clients, come just two months after the government banned private lenders from collecting taxes and ordered state banks to act as sole tax collectors.

Banks officials said that both measures will lower revenue and ultimately hit profitability.

The Turkish bank regulator also made it more difficult for foreign investors to bet against the lira by further restricting their access to liquidity. However, the limitations also may hurt banks as they use the market to raise lira funding to finance domestic lending.

Another source of worry among bankers was a draft law that will stiffen punishments for insider trading and market manipulation as part of a broad overhaul of the industry and capital markets. The proposal was submitted to parliament by President Recep Tayyip Erdogan’s AK Party without consulting industry officials.

Berkant Ulgen, the legal adviser of the Banks Association, told a parliament commission that they received the draft banking law a day after it was submitted to the parliament.

RELATED STORIES: Turkish banks President Recep Tayyip Erdogan Banks Association of Turkey





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