As we wrap up the first half of 2019, we believe that we have largely left behind the volatilities experienced last year with the support of measures taken, and upon the recovery of the global conditions.
Monetary tightening steps by the central banks of developed countries had a negative impact on the markets last year. As a result, foreign exchange rates and inflation rose in Turkey, where the CBRT (Central Bank of Turkey) took significant tightening steps in monetary policy. Furthermore, the economy administration particularly focused on rebalancing and stability in the New Economy Program, rather than growth.
The global growth trend experienced a slowdown from the second half of last year, which seems to have paved the way for expansionary monetary policy by the central banks of developed countries in the upcoming period. This stance will undoubtedly support developing countries and Turkey in terms of capital flows.
Driven by the measures taken and the global liquidity conditions, the inflation rate was reduced to 15.7% in June, from around 20% at the beginning of the year. Inflation will continue to decline in the upcoming period, as our projections point to a possibility that inflation may drop below 10% level in September-October. On account of this improvement, the CBRT cut the policy rate by 425 bps in the July. We believe that the rate cut cycle will resume in a gradual manner throughout the rest of the year, and thus allow the interest rates to subside and the slowing growth trends to recover in the second half of the year.
Another positive outcome of the economic measure is observed in the external deficit. The current account deficit to GDP ratio fell to 0.3% in May, from 5.6% in 2017. We estimate that the 12-month cumulative current account balance will see a surplus for the first time since 2002, which will pave the way towards a healthier economic recovery.
QNB Finansbank maintained its successful growth in the first half of 2019. Driven by the strength of our principal shareholder QNB (Qatar National Bank), our bank continues to further contribute to the economy of our country each day.
As of June 30, 2019, the total assets of our Bank increased by 9 percent compared to the year-end of 2018, reaching TRY 171 billion 203 million, while net loans rose by 6 percent to TRY 100 billion 63 million, and customer deposits grew by 10 percent to TRY 91 billion 695 million. Our bank’s net period profit realized at TRY 1 billion 280 million.
On the other hand, our ongoing capital strength allows QNB Finansbank to continue its commitment in corporate social responsibility projects. We continue to launch critical projects with invaluable contributions of our volunteering bankers within our “Small Hands Big Dreams” Platform aimed at preparing our children for the future.
Our esteemed financier colleagues and stakeholders have undoubtedly contributed to this steady growth at QNB Finansbank. I would like to once again express my heartfelt gratitude to everyone who has contributed to this achievement.
Ömer A. Aras
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