Bank Accounts

[johnny1]

What does everybody think and feel about the bank accounts in kktc with whats going on with the lira etc...
Are our bank accounts safe??

[EnjoyingTheSun]

That's a tricky question. I wouldn't be that confident of having a large amount over here and especially not in lire.

I think with the reserve to lending ratios over here which I understand are 30% I can't see the banks going bust as such but my worry is if the situation worsens the government may step in and do something crazy.
I think it would be a brave person who had too much money over here at the moment

[Reyntj]

Some of the local banks have goverment debt every month i read the goverment is bankrupt . Then the bigger banks like garanti ...look waht happened to depositors in greek bank alphabank etc .

[sophie]

Reyntj…………..make my day, what did happen to Green and Alpha banks?

[Hedge-fund]

What does everybody think and feel about the bank accounts in kktc with whats going on with the lira etc...
Are our bank accounts safe??

The banks here are about as safe as a Christmas Club.

If you have more than enough to cover regular bills in the bank you are running a real risk.

For some the reward outweighs the risk but if you are talking due diligence you will ensure you have cover for your deposit.

My advice - if you want safe exposure to turkish currency and rates of interest use a turkish bank with a UK presence and UK FSCS protection.

[Deniz1]

Name names Hedgefund for us lesser mortals

[Panchocat]

You beat me to it Deniz1! Looking on line it appears that Turkish Bank would fit the bill.

[johnny1]

which banks are they hedge fund?

[Hedge-fund]

Sorry for the delay.

Yes Turkish Bank have branches in London and enjoy the £85k UK Govt FSCS protection.

The banks in the TRNC say they have some protections but if we are being honest I would not be confident of getting anything back if there were bank failures.

You can hold accounts in Turkish Bank in the UK and feed the interest into Turkish Bank TRNC - or any other banking transactions you want to do.

[johnny1]

Do you see any bank failures?

[Hedge-fund]

Difficult question to answer.

Who saw Barings coming? Northern Rock, Lehmans?................if there is bad management and practices, poor compliance plus a perfect storm of circumstances anyone can go under.

If i was going to investigate which specific banks were showing signs of distress I'd start with the interbank lending rates (how much banks charge each other to lend cash to each other short term - this gives a good snapshot of their status) - then their exposure to bad loans and foreign currency debt.

My comments were more general and in reply to the original post asking if bank accounts are safe. In my opinion if you use them for day to day banking your risk exposure is small. For larger amounts I would encourage people to get professional advice on maybe reducing/spreading the risk.

[sophie]

Rightly or wrongly Hedge Fund, I probably know less than an awful lot of people on this forum, but I not only "spread bet" what I have over a number of institutions but in a number of countries where it seems safe to do so. For your ordinary bod doing a stress test is almost impossible, but it certainly makes listening to the morning world news a nerve wracking experience that's for sure!! Biggest draw back being the interest rates are never as much as sticking it in one or maybe two institutions.

[EnjoyingTheSun]

If i was going to investigate which specific banks were showing signs of distress I'd start with the interbank lending rates (how much banks charge each other to lend cash to each other short term - this gives a good snapshot of their status) - then their exposure to bad loans and foreign currency debt.

Where would you find this information?
Whats your opinion on NearEast and CreditWest?

[Hedge-fund]

If i was going to investigate which specific banks were showing signs of distress I'd start with the interbank lending rates (how much banks charge each other to lend cash to each other short term - this gives a good snapshot of their status) - then their exposure to bad loans and foreign currency debt.

Where would you find this information?
Whats your opinion on NearEast and CreditWest?

You'd need access to a fully loaded Bloomberg system to get the overnight bank to bank rates and even some of them may be withheld for commercial reasons. If you were serious you'd have to employ an analyst to go through the numbers and charts (worth doing if you were an investor or depositing substantial amounts)

I checked the latest annual report from Creditwest and what jumps out is the "Loans and Advances to customers" on page 5. Total assets of the bank are quoted at TL2.45B but TL1.6B of this is out on loan. - this is what I was referring to when I said I'd check their exposure to bad loans. Also, this annual report covers a period before the currency plummeted.

https://www.creditwestbank.com/wp-conte ... En2017.pdf

I couldn't find similar info regarding Near East but that may be because Credit west is listed and has to produce accounts for its shareholders.

The Turkish private sector, mostly banks, has to repay almost $180 billion of foreign debt loans over the next 12 months alone - bad enough in any circumstances but with the currency collapse this will cause very severe problems.

I'm obviously not qualified to give financial advice and am just trying to give an opinion - I would suggest again that anyone with concerns gets professional advice about reducing/spreading their risk. My advice is based on my own reading of the situation and a genuine heads up as to what may be around the corner if erdogan doesn't come to his senses.

If he was clever he would personally be buying billions of Lira via secret avenues at these prices and then raise rates at the Central Bank next week and then re-engage with Trump (release Andrew Brunson) - and finally commit to fiscal & monetary prudence. The lira would be 5.5 to the pound overnight.

If you want to chat anything through in any detail PM me or I'm here for the next six weeks so could chat over a few beers.

[ljarvo]

I found this an interesting read...his partner George Soros at Quantum Partners also knows a thing or two about currencies after breaking the Bank of England..

https://www.dailysabah.com/economy/2018 ... ish-assets

[PapaBravo]

Twice in the last fortnight I have transferred a sum of money (GBP) from one local bank to another - money was received within 24 hrs. The receiving bank then did a GBP transfer to my UK account and the money arrived today - no problems at all.

[David]

Hedge-fun ... Turkey has just posted 5.2% growth for Q2 this year that is very impressive dont you think ?

[Hedge-fund]

Hedge-fun ... Turkey has just posted 5.2% growth for Q2 this year that is very impressive dont you think ?

I'm not sure what this has to do with the safe banking question - and I'm no expert on the Turkish economy but isn't this latest GDP figure a sharp fall on previous quarters and in the context of inflation at 18%?

The economic numbers coming out of Turkey are bad but to be honest they are meaningless - geopolitical factors far outweigh the traditional at the moment and all eyes should be on this weeks Central Bank meeting.

They should hike rates and set out a plan for monetary policy prudence - this will calm the markets. Erdogan could stop this but there are signs he will allow some sensible handling of the situation.

Then erdogan needs to step in to undo his personality based carnage - that may take a bit longer in an attempt to save face.

Taking a punt I'm going to change up a lump of sterling tomorrow because I think Lira will strengthen on Thursday.

[Hedge-fund]

They have raised rates by 625 basis points.

The devil will be in the statement and data detail once everything is released and digested.

The exchange rate will strengthen as a knee jerk but longer term and for much bigger currency movements it's all about erdogan.

[Reyntj]

Inthink a lot if damage has already been done i read an article comparing the current situation to 2001 and 1994 lira crisis in the older ones the lira dropped 60 % and 70 % this time so far its only 40 % however this tme round there is much more foreign debt held by both state and companies so 40% may be a comparable situation . Bedfore there was a recession and imf bailouts. It looks to me like a substantial gdp contraction over the next year or so . Hoe long and how deep will largely depend on the rest of the world perfirms as the u.s. is probably due a correction to after all the cash from the trump tax reductions has been spent on sharebuy backs and propping up dividends has been spent .

[Hedge-fund]

If i was going to investigate which specific banks were showing signs of distress I'd start with the interbank lending rates (how much banks charge each other to lend cash to each other short term - this gives a good snapshot of their status) - then their exposure to bad loans and foreign currency debt.

Where would you find this information?
Whats your opinion on NearEast and CreditWest?

You'd need access to a fully loaded Bloomberg system to get the overnight bank to bank rates and even some of them may be withheld for commercial reasons. If you were serious you'd have to employ an analyst to go through the numbers and charts (worth doing if you were an investor or depositing substantial amounts)

I checked the latest annual report from Creditwest and what jumps out is the "Loans and Advances to customers" on page 5. Total assets of the bank are quoted at TL2.45B but TL1.6B of this is out on loan. - this is what I was referring to when I said I'd check their exposure to bad loans. Also, this annual report covers a period before the currency plummeted.

https://www.creditwestbank.com/wp-conte ... En2017.pdf

I couldn't find similar info regarding Near East but that may be because Credit west is listed and has to produce accounts for its shareholders.

The Turkish private sector, mostly banks, has to repay almost $180 billion of foreign debt loans over the next 12 months alone - bad enough in any circumstances but with the currency collapse this will cause very severe problems.

I'm obviously not qualified to give financial advice and am just trying to give an opinion - I would suggest again that anyone with concerns gets professional advice about reducing/spreading their risk. My advice is based on my own reading of the situation and a genuine heads up as to what may be around the corner if erdogan doesn't come to his senses.

If he was clever he would personally be buying billions of Lira via secret avenues at these prices and then raise rates at the Central Bank next week and then re-engage with Trump (release Andrew Brunson) - and finally commit to fiscal & monetary prudence. The lira would be 5.5 to the pound overnight.

If you want to chat anything through in any detail PM me or I'm here for the next six weeks so could chat over a few beers.

Ok he took the first step in raising rates and tomorrow may take the 2nd step in releasing Brunson.

[ljarvo]

Hedgefund

I am sure Jim Rogers is privately buying buckets loads of lira at this time and assets in Turkey - certain people in the world play the markets in volatile times

Your posts are informative and interesting and I can relate to them having worked for one of the biggest PE groups.

Thank you

[Hedge-fund]

2nd step taken. Brunson has been released.

There is a Central Bank meeting before month's end where we should see further tightenning of monetary policy but what markets want to see is commitment to prudence in monetary and fiscal matters before releasing its stranglehold. It's either that or IMF and I don't think erdogan wants that.

The wise men (and the crooked politicians) will be positioned already.