Türkiye | Monthly Banking Sector Outlook. September 2025

Summary

Financial conditions started to turn supportive a bit in September with the fall in credit interest rates. With a lesser fall in TL deposit rates though, margins are still on pressure. Yet, the sector well manages the cost evolution and expanding loan volumes in higher yield segments which improves the NIMs gradually.

Key points

• Key points:
• Loan growth maintains a moderate momentum, hovering around 28% with its 13w trend rate. Amid calibrated gradual rate cuts in the coming months, the CBRT will likely continue to rely on the credit and deposit rules so that the disinflation process can continue.
• Consumer credit growth remains above the commercial credit growth, driven mainly by non-capped items. Credit card growth keeps its strong momentum as well. FC lending decelerates, affected by growth caps.
• Following the end of the KKM scheme in August (which fell to below $7bn as of Sep), modest demand for FC funds and FC deposits (led by gold most recently) continues. The current dollarization ratio of residents -including funds- accelerates to slightly above 40% but stays historically low.
• We expect the NIMs to improve further in 4Q25 and the ROE levels to reach around 26% in 2025 (vs. our previous 25% call) and 28-31% in 2026 for deposit banks, depending on the gains over the inflation outlook and the room for the CBRT easing.
• The BRSA decision taken in July on credit card and GPL debt restructurings are easing the upward pressure on NPLs, albeit with potential lagged effects delayed into 2026. We expect the currency adjusted cost of risk (CoR) to be nearly 150bps in 2025 compared to our previous forecast of 200bps, which can still deteriorate up to around 200bps in 2026.

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