Istanbul-listed Isbank (ISCTR) sold a Turkish lira (TRY) 745mn portfolio of non-performing loans (NPLs) to asset management firms Emir, Istanbul, Gelecek and Varlik for a consideration of TRY72mn, suggesting a 10% recovery rate, according to a stock exchange announcement filed by the lender.
The move was declared two days before the firing of the central bank governor by presidential decree late on March 19 that has shaken Turkish markets.
Isbank’s loan volume increased by 28% y/y to TRY345bn at end-2020.
Data on Isbank.
The transaction was the first major NPL portfolio sale made by a Turkish lender for around one year and the suggested recovery rate is relatively good. Peers will now be watched to see whether they may follow the Isbank move amid the ongoing economic turmoil.
At end-January, the Turkish banking industry’s problem loans ratio was estimated at 15.2%.