Debt octopus!

The Central Bank published the first Financial Stability Report of the year. The report stated that although the ratio of household debt to GDP continued at a low level, it was stated that the debt was concentrated in individual credit cards and overdraft accounts (KMH). The report stated regarding individual credit growth, “While individual credit cards (BKK) and consumer loans continue to be the determining factors in individual credit growth, individual credit growth has slowed down somewhat this year.”

ABOVE AVERAGE

The report noted that the share of BKK debt in individual loans reached 47 percent. It was stated that BKK left consumer loans behind and became the most widely used debt instrument. It was noted that the share of KMH, which has been used at a high level recently, in individual loans reached 12 percent, while its share in consumer loans exceeded 32 percent. The report emphasized that factors such as consumer inflation and ease of use due to digitalization supported the growth of credit card balances. It was also stated that the use of KMH, which provides consumers with easily accessible financing for their short-term needs and is not subject to any growth limit until the end of March, is also strong.

It was noted that the number of credit card users reached 29.3 million as of March 2025. It was stated that the share of debt paid below the minimum, which was 12.2 percent in the previous report period, decreased to 11.8 percent due to the restructuring of individual credit card debts in September 2024. On the other hand, it was noted that the ratio of total debt with at least one day of delay to the BKK balance was 27.3 percent, approximately 5 points above the historical average. The report also showed that the amount of debt accumulated in asset management companies was rapidly increasing. It was seen that the receivables of asset management companies, which were 47 billion TL in the same quarter of the previous year, reached 79 billion TL in the first quarter of the year. According to the data, the number of these people was 2 million 76 thousand.

It was noted that the increase in the individual NPL ratio was the determining factor in this increase, where the total NPL ratio of the banking sector increased to 2.1 percent. It was mentioned that the individual NPL ratio exceeded its historical average with 3.7 percent. As of the first quarter of this year, the ratio of individual loans with delayed payments to gross loans increased to 4.7 percent, while the ratio of corporate loans increased to 1.2 percent. It was stated that the loans monitored under three groups according to the number of days in arrears compared to March 2024 increased on a per-group basis. It was stated that the ratio of consumer loans with delayed payments reached 5.4 percent, and the ratio of credit cards reached 5.1 percent.