Turkey's leading banks have talked about the possibility of forming a bad loan manager in a bid to curb the stock of nonperforming loans in the country, Reuters reported, citing people familiar with the talks.
The ongoing talks began even before Turkish banking regulator BDDK ordered banks to convert 46 billion lira in loans into bad loans and make provisions for losses by 2019-end, the sources added. The envisaged asset management company, or AMC, would reportedly house banks' higher-quality nonperforming loans.
This could also be an alternative to setting up a so-called fund-of-funds to manage billions of dollars of soured loans in the construction and energy sector, Reuters wrote Sept. 19.
If approved, it would take some time to finalize the AMC and no final decision has been made on the matter. Lawyers had also been consulted on the idea.
As of Sept. 19, US$1 was equivalent to 5.70 Turkish lira.
