Bank Home Loans

The Big Difference Between Public Decency And Private For Home Loans In Turkey


Over the past five and a half years, the volume of home loans of public banks has increased by 284 percent, while that of private banks has declined in real terms. Former assistant general manager of Ziraat Bank pointed to the interest rate risk of Turkish state-owned banks.

In housing as the leading sector in credit expansion in recent years, the big difference between public banks and private banks is decidedly noticeable.

Former assistant general manager of Ziraat Bank Prof. Dr. According to data compiled, the volume of housing loans of state-owned banks, which was 46.6 billion rubles at the end of 2015, increased to 178.9 billion rubles in May 2021. The increase over five and a half years was 284 per cent.

In domestic private banks, the volume of home loans decreased from TL 50.9 billion to TL 47.9 billion during this period. Thus, the volume of home loans of domestic private banks declined by 6 percent in five and a half years. The real decline was much greater when inflation was taken into account.

In foreign private banks, there was a very limited nominal increase of 5 percent in the volume of home loans during this period, and the figure increased from TL 46.2 billion to TL 48.4 billion. Foreign private banks have also contracted the volume of home loans in real terms over the past five and a half years.

Looking at the total banking sector, the volume of home loans increased by 92 percent from TL 143.7 billion to TL 275.2 billion. Given that cumulative inflation during this period was 106.8 percent, the total volume of housing loans contracted by 5.5 years.


Head of Finance and Banking Department of Başkent University Prof. Dr. “While there will be no significant change in the housing loan figures of other bank groups, the increase in housing loans issued by state-owned banks is remarkable,” said.

Dr, who stated that state-owned banks used housing loans in 2020 with an average interest rate of 8 percent, but these loans are financed today with an average interest rate of 16 percent, said: “Given the increase in the loan amount, interest rate risk seems to be at a significant level”.

May April-May 2020 net profit of TL 5.2 billion announced by the public deposit banks, 2021 net loss of TL 1.1 billion in the same period. Prof. Dr. pointed to loans distributed at low interest rates last year and loaded Treasury bonds as the cause of the loss.

Housing loans, distributed by state-owned banks at below-inflation rates, have also encouraged house price growth.

In recent years, the Treasury has transferred large amounts of capital to state-owned banks to encourage credit expansion.