Türkiye | Monthly Banking Sector Outlook. April 2026

Summary

Credit growth maintained strong momentum in April pushing its trend rate to pre-regulation levels of early 2026 despite persistently high interest rates. Increasing inflation expectations and deepening real appreciation appear to be easing financial conditions as of April supporting credit growth via mostly non-capped items

Key points

• Key points:
• The divergence in credit growth rates between private and public banks became more pronounced in April, mainly driven by differences in TL lending. Public banks recorded stronger growth in consumer loans, while private banks showed a stronger push in commercial lending during the month.
• The dollarization tendency is kept under control, as seen in residents’ savings continuing mostly in TL, supported by TL deposit rules and the maintenance of the CBRT funding rate at 40%.As the currency remains to be the main anchor for disinflation, TL deposit rules will most likely stay particularly important.
• Our newly constructed financial stress indicators show a limited deterioration in April, in both commercial and retail segments. The corporate distress most recently becomes more evident with the rise in concordat filings and restructured loans, yet still remains far below the stress level in 2H25.
• Based on different scenarios regarding the conflict, the RoE of the deposit banks might stay flattish in 2026 (vs. 25.6% in 2025end) or might even somewhat ease below this level due to possible lower ROE improvement in public banks. Based on the latest 1Q26 data, the differentiation in improvement will most likely depend on the loan pricing dynamics shaped by loan growth rates.
• Capital ratios continued to decline in March 2026, driven mainly by the decrease in private banks’ CET1 capital following sector-wide dividend payments made during the month. Nevertheless, overall capital ratios remain comfortably above regulatory minimum requirements.

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