Turkey

Turkish banks on Monday offered customers some relief from debt repayments and pledged more cash, the latest steps in the campaign to limit the economic fallout from the coronavirus outbreak, Bloomberg News reported. State lenders including Ziraat Bank, Halkbank and Vakifbank allowed clients to postpone repaying debt by three months. Banks also pledged to restructure existing loans to give companies grace periods of as long as 12 months when they aren’t required to make any payments.

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Turkish conglomerate Cengiz Holding is prepared to bid for British Steel if the planned sale of the UK company to Jingye collapses, adding to pressure on the Chinese group to finalise the deal in coming weeks, the Financial Times reported. “We are watching developments closely and are ready to make a bid for the whole of British Steel,” said Omer Mafa, chief executive of Cengiz, in a statement on Sunday.

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After winning Istanbul’s local election in a landslide, Mayor Ekrem Imamoglu said he’s had to fight through a budgetary “black hole” of about 14 billion liras ($2.4 billion), Bloomberg News reported. Speaking on Monday at a news conference in Istanbul to mark his sixth month in power, Imamoglu said the municipal government of Turkey’s largest city had 6 billion liras of overdue debt and ran a budget deficit of 7.9 billion liras when he took over.

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Turkey is planning to limit the amount of time companies in trouble can be shielded from debt repayments, a welcome step for the nation’s banks facing a wave of debt restructuring requests after last year’s recession, Bloomberg News reported. The Treasury and Finance Ministry is working on the necessary regulatory changes to lower the so-called concordat period from the current ceiling of 23 months. The period will be capped at six months to a year, the person said, asking not to be identified as the plan has yet to be made public.

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Turkey’s banking regulator eased measures on how banks classify credit to once-troubled companies, helping lenders to potentially avoid adding more non-performing loans to their books, according to people familiar with the matter, Bloomberg News reported. The Banking Regulation and Supervision Agency, or BDDK, will now leave it to lenders to decide which company loans need to be reclassified as non-performing, said the people, who asked not to be identified because the changes haven’t been publicly announced.

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Turkey’s BDDK banking watchdog changed loan classification regulations so that banks are able to remove from their books “Group 5” classified non-performing loans (NPL), marking another step to clean up bad debt from last year’s currency crisis, Reuters reported. The regulatory change was published in Turkey’s Official Gazette on Wednesday. The move “allows Turkish banks to remove Group 5 non-performing loans from their NPL books should the borrower default and there be no possibility of recovery for the foreseeable future,” said Seker Invest, an investment firm.

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European Bank for Reconstruction & Development will present a set of proposals to Turkish authorities and banks on Friday on how to overcome the nation’s bad-debt predicament, Bloomberg News reported. The London-based lender is suggesting that the definition of non-performing loans be updated in line with those of the European Banking Authority and that guidance be given on how banks value and manage collateral for credit. It is also urging that a longer-term solution be put in place on how troubled debt is restructured.

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Turkish regulators and bankers are meeting this week to try to hammer out a regulatory tweak that would make it easier for foreign investors to buy some of the tens of billions of dollars worth of soured loans left over from last year’s crisis., Reuters reported. According to five people familiar with the effort, the BDDK banking watchdog and Capital Markets Board aim to draft changes that could remove the last hurdle to Turkish banks selling non-performing loans (NPLs) to hungry foreign buyers.

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Exclusive talks between the U.K.’s Insolvency Service and Turkey’s Ataer Holdings about a sale for British Steel have ended without a deal, Bloomberg News reported. The official receiver for the company, who is managing the sale, will hold discussions with other parties and the potential buyers are expected to visit British Steel sites in the coming days, the insolvency service said on Wednesday. Talks with Ataer, which co-owns steelmakers in Turkey, are continuing as well.

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A Turkish group’s acquisition of British Steel depends on lowering the cost of contracts the U.K.’s No. 2 steelmaker holds with its suppliers, according to a person familiar with the matter, Bloomberg News reported. Oyak Group, which manages military pensions, entered exclusive talks in August to buy British Steel, the first step in a rescue that could save about 5,000 jobs in the U.K.’s manufacturing heartland.

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