Türkiye | Banking Sector Outlook. September 2026

Credit growth continues to lose momentum as macroprudential restrictions remain the key sector driver. We continue to expect 2026 ROE at around 25%, with risks tilted to the downside. Further decline in TL funding costs should support margins, although slower loan growth and rising costs may constrain the ROE recovery.

Key points

• Key points:
• Public banks are sustaining a stronger credit trend than private banks, with the divergence becoming more pronounced during September. Regarding segments, public and private banks have been differentiating in all sub-segment details.
• Under our baseline scenario, we expect the credit growth cap framework to remain in place through 2027, accompanied by subsidized credit packages and potential further adjustments to credit growth caps, particularly in commercial segment.
• Dollarization remains low across the banking sector, with the ratio at public banks declining to below 35%. With the currency remaining the main anchor of the disinflation process, we continue to expect the TL deposit rules and high real rates to continue as an important buffer to support TL demand and, ultimately, currency stability.
• Profitability remains under pressure, though the pace of deterioration has eased. Deposit-banks’ net income rose 18% m-o-m in August after contracting in July, while cumulative ROE declined to 23%. NII contribution continues to improve at private banks, while trading gains weigh on sector profitability.
• Asset quality is deteriorating gradually, led by consumer lending. The overall NPL ratio still remains historically low, but particularly the ratio in GPLs calls for caution. We expect the NPL ratio and cost of risk to remain on an upward path in the coming months, with household balance-sheet pressure and recent investment-fund-related losses posing additional upward risks

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