16:41 GMT +327 February 2017
    A vendor passes Galata Bridge near the illuminated Suleymaniye mosque in Istanbul on January 25, 2016

    The Burden of Russian Sanctions: Turkey Gripped by 'Ballooning' Bad Loans

    © AFP 2016/ OZAN KOSE
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    The sanctions Moscow slapped on Ankara, as well as a plummeting number of Russian tourists, have added significantly to a rise in the number of bad loans in Turkey, according to expert Constantine Courcoulas.

    Turkey remains in the clutch of ever-increasing bad loans which were caused by the Russian sanctions and the shrinking tourist visits from Russia, Istanbul-based emerging markets specialist Constantine Courcoulas wrote in an article for the US news agency Bloomberg.

    In his article "Ballooning bad loans in Turkey seen worsening as tourists flee," Courcoulas recalled that the country has already been afflicted by an unprecedented increase in bad loans, according to this week's data from the Ankara-based Banking Regulation and Supervision Agency.

    "The nation's lenders' non-performing loans climbed to 3.18 percent of total credit in January, the sixth straight monthly increase and the highest proportion in almost five years," Courcoulas said.

    He specifically pointed to deepening corporate distress in Turkey, which he said "makes it harder for companies to pay down debts."

    "The rise in bad loans is compounding the challenges facing Turkey's $814 billion banking industry as a combination of currency depreciation, Russian sanctions and waning tourist visits," Courcoulas pointed out.

    He quoted Apostolos Bantis, a Commerzbank credit analyst in Dubai as saying that "the trend is likely to increase and intensify."

    "While I don't see the situation running out of control, the impact of Russian sanctions and the blow to the tourism industry… will all take a toll on the corporate sector," Bantis said.

    He was echoed by Cagdas Dogan, an analyst at BGC Partners in Istanbul, who warned of the far-reaching consequences of Russian sanctions and scarce tourist visits, according to Courcoulas.

    "The worst may not be over for the industry, as tourism companies will contribute to a deepening of the bad-loan quandary," Dogan said.

    Russia imposed sanctions on Turkish goods, air travel, and employment contracts following Ankara's decision in November 2015 to shoot down a Russian Su-24 jet which Ankara claimed violated Turkish airspace.

    In January, Turkish Deputy Prime Minister Mehmet Simsek said that the country will lose $3.1 billion worth of trade in 2016 due to Russian economic sanctions.

    Earlier, Ankara appealed to the World Trade Organization, arguing that the sanctions allegedly violate trade rules. Moscow responded by saying that its economic actions are fully within the framework of the WTO rules.


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    • avatar
      sanctions against wto rules...and what of the men who died? Maybe the turkish government should follow them and then see how the wto is so important.
    • Capt'nSkippy !!!
      Let the bastards rot!!! They lay in the same bed of the sweptics (US) and treat Russia in its derogatory manner, let them suffer, unfortunately not like it treated the Syrians!!!
    • Mikhas
      All the worst to Turkey!

      First for having a jihadist megalomaniac retard for "President", plunging the country into dangerous conflicts, misery and devastating wars, jeopardizing the very existence of Turkey as we know it and being too ignorant and backwards stupid to do anything about it, especially those knowing better, not being uneducated rural peasants who are mullah Erdogans traditional power base, they really deserve the freak who runs the country as a personal fiefdom.
    • avatar
      Erdogan & Co has shot themselves in the foot. They're in a no win situation and all they will be able to say is: "If we only hadn't ....."
      I would almost be willing to bet that the present Turkish govt will be gone withn six months time.
    • Drain the swamp
      Russia,Iran and Azerbaijan have to cut off gas whic generates 60% of Turkeys electricity and plunge Turkey into darkness. Only then the descendants of the sultans 1000 slav harem will come to their senses and remove this fool erdogan. But the 250,000 dead Syrians will haunt the wannabe ottoman.
    • Jet fuel can't melt steel beams
      Who is isolated again? Not Russia!....isn't erdo the mini megalo!
    • avatar
      tony pin reply toCapt'nSkippy !!!(Show commentHide comment)
      Skippy !!!, Good one Skip ... sweptics. lol
    • Сергей Помидоров
      The link to the Bloomberg article is incorrect, here is the right one:
    • avatar
      Erdogan is a loser
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