Quantitative tightening and selective credit policy started to be reflected in the commercial loan data. As targeted by the Central Bank’s selective credit policy, according to Banking Regulation and Supervision Agency (BRSA) data, export and investment loans are increasing, while the growth rate in other types of commercial loans is slowing down.
According to BRSA data, export credits increased by 65 percent in the first 10 months of this year, while business loans grew by 29.4 percent, installment commercial loans by 32.7 percent and SME loans by 50.1 percent. According to Central Bank data, investment and export credits, which came to a standstill in the May-June period, increased more than 5 times in the July-September period.
According to the BRSA monthly data, export credits increased to TRY 1.2 trillion as of the end of October, while this figure was TRY 718.88 million in October last year and TRY 771.5 million at the end of 2022. Export credits, which grew by 24 percent from the end of last year to the end of May, grew by 33 percent from May to October. Export credits gained momentum with the new economic administration. In 10 months, export credits grew by 65 percent. While export credits grew by 129 percent in the first 10 months of last year, the increase in the whole year was 133 percent.
Export-guaranteed credit back in growth
Export-guaranteed investment credits increased by 28.5 percent in the first 10 months of this year to TRY 34.8 billion. Between January and May, export-guaranteed investment credits increased by 6.35 percent, while from May to the end of October, the increase reached 21 percent. In the first 10 months of last year, export-guaranteed investment credits contracted by 6.7 percent. In the whole of 2022, the contraction in export-guaranteed investment credits was 5.45 percent. Other investment loans also grew by 36.55 percent in the first 10 months of this year and reached TRY 952 billion. The increase in the growth rate of other investment credits after May is also noteworthy. While other investment loans grew by 11.2 percent in the first 5 months of the year, the growth rate increased to 22.8 percent from May to October. In the first 10 months of last year, the growth rate of other investment loans was 37 percent.
On the other hand, the growth in SME loans, which grew by 35 percent from the end of last year to the end of May, slowed down from May to the end of October and declined to 11.4 percent. SME loans increased to TRY 3 trillion 45 billion and this figure was TRY 2 trillion 28 billion at the end of last year. While SME loans achieved a growth rate of 50.1 percent in 10 months of the year, they lagged behind last year. According to BRSA data, the growth in SME loans in the first 10 months of last year was 66.5 percent, while SME loans grew by 88.8 percent in the whole year. This year, SME loans lost momentum in the second half of the year.
According to CBRT data, the monthly growth in TRY-denominated commercial loan stocks excluding investment and exports was TRY 104 billion in May, while investment and export credits grew by TRY 6 billion and CBRT’s rediscount and advance loans with investment commitments (YTAK) decreased by TRY 3 billion. In June, commercial loans increased by TRY 16 billion, investment and export loans grew by TRY 3 billion and CBRT loans declined by TRY 6 billion. In August, the picture changed completely, with commercial loans increasing by TRY 75 billion, investment and export loans by TRY 21 billion and CBRT loans by TRY 14 billion. By September, the monthly increase in commercial loans decreased to TRY 52 billion, while investment and export credits grew by TRY 54 billion and CBRT rediscount and YTAK credits grew by TRY 19 billion.
CBRT Governor also drew attention to the change
Central Bank Governor Hafize Gaye Erkan’s speeches frequently draw attention to the selective credit policy. In her speeches, Erkan noted the improvement in the composition of commercial loans as a result of effective steps towards selective credit tightening and emphasized that investment and export credits, which came to a standstill in the May-June period, recovered in the July-September period and increased by more than 6 times. In addition, Erkan stated that a significant increase was observed in rediscount and advance loans with investment commitments extended through the Central Bank in this period and said, “Rediscount and advance loans with investment commitments have made a significant contribution to the commercial loan composition in the last 3 months in the targeted direction.”