ISTANBUL, Sept 18 (Reuters) - The head of Turkey’s banking association said on Wednesday that about half of the 46 billion lira ($8.1 billion) of loans that under a new regulation will be reclassified as non-performing comes from the energy and construction sectors.
In an interview with broadcaster NTV, Huseyin Aydin said that banks would need to provision 12 billion lira for the new non-performing loans, or NPLs.
Most of the loans to be transferred to NPLs were in foreign currencies and they did not include debt belonging to state-run firms, he said. In a worst case scenario, up to 20% of banks’ “Tier 2” loans would become NPLs, he said. ($1 = 5.6639 liras) (Reporting by Ali Kucukgocmen; Editing by Jonathan Spicer)