UPDATE 1-Turkish banks post strong Q1 lending growth

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ISTANBUL, May 15 (Reuters) - Turkish banks Vakifbank (VAKBN.IS: Quote, Profile, Research), Halkbank (HALKB.IS: Quote, Profile, Research) and Yapi Kredi (YKBNK.IS: Quote, Profile, Research) on Thursday posted lending growth of more than 10 percent for the first quarter of 2008 versus the end of last year.

Yapi Kredi, the fifth-largest bank by market capitalisation, said its lending rose to 32.2 billion lira from 29.1 billion at the end of last year.

It said net profit rose 108 percent to 447 million lira for the first quarter, year on year. The bank also approved a 920 million lira capital hike, which Koc Finansal Hizmetler, its main shareholder with an 81.8 percent stake, would back.

Koc Finansal is owned jointly by Koc Holding (KCHOL.IS: Quote, Profile, Research) and Italy's UniCredit (CRDI.MI: Quote, Profile, Research).

Lending growth has been strong in European Union-applicant Turkey despite having among the highest interest rates in emerging markets. The central bank raised borrowing rates on Thursday to 15.75 percent from 15.25 percent.

Vakifbank, the country's fourth-largest lender, saw first-quarter lending rise to 26.1 billion lira from 23.5 billion lira at the end of last year.

But the bank's unconsolidated first-quarter net profit fell 10 percent year on year to 196.4 million lira.

Vakifbank's net interest income rose to 482.2 million lira from 407.8 million a year earlier and said total assets ended the quarter at 46.6 billion, up from 42.4 billion at the end of last year.