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On the back of both internal & external shocks, the CBRT hiked the ON lending rate to 46% and squeezed TL liquidity in March. With the tightening steps, credit growth decelerated and the increased funding costs are expected to weigh on the 2025 profitability of the sector.

Credit growth accelerated throughout February beyond the growth caps. Therefore, the monthly growth limit has been reduced further for FC lending at the start of March. The CBRT aims not to allow demand conditions to contain the disinflation process, signaling new macro-prudential measures if necessary.

Profitability and NIMs of the sector have started to improve in 4Q24, which will continue with the rate-cutting cycle of the CBRT. The monetary stance remains to be supported with the macro-prudential measures. We expect the ROE of deposit banks to barely improve to 30% by end 2025 from 28.4% at the end of 2024.

The weekly growth of FX-adjusted credits accelerated from 0.3% to 1%. The acceleration was due to both consumer and commercial credits in the sector. Its 4w trend continued to move upwards for the 3rd week in a row and reached almost 0.7% (highest since June’24).

On the week of 22nd November, the weekly growth of FX-adjusted credits continued to accelerate due to strong weekly increase in consumer credits in the sector.

On the week of 15th November, weekly growth of FX-adjusted credits accelerated from 0.2% to 0.4% due to commercial credits in public banks. 4w trend rate of total credit growth rose to 0.44%.

On the week of 1st November, the weekly growth of FX-adjusted credits slightly decelerated from 0.6% to 0.5% due to both consumer and commercial credits in the sector. However, last 2 weeks’ push moved up the trend rate of total credit growth a bit.

In this publication you will find, on a weekly basis, our selection of the most relevant news regarding financial regulation.