Turkish banks' near-watch loans jump 57% to 2.29T lira

Turkish banks saw a sharp rise in loans flagged as higher risk, while the share of restructured credit climbed to its highest level in four years, according to the Turkish Banks Association.

The association’s data showed that as of March 2026 total loans stood at 24.7 trillion lira. Within that stock, restructured loans accounted for 5.2%, a proportion officials said was the largest since 2022.

Near-watch loans rise to 2.29 trillion lira

The Turkish Banks Association said loans classified as “near-watch” reached 2.29 trillion lira. The association reported the category increased 57% year on year.

The release did not identify individual banks. It also did not provide additional breakdowns in the figures cited, beyond the aggregate totals and shares.

Restructured loans reach a four-year high share

Officials said the 5.2% restructured share is the highest in four years. The association attributed the increase to greater workout and restructuring activity across several loan categories.

Turkish Banks Association

The figures indicate that a larger portion of the loan book is being managed through restructuring tools. The association’s statement framed the change as reflecting broader activity across multiple categories rather than a single segment.

Why restructurings matter for bank balance sheets

Analysts said a higher restructured share can raise provisioning needs if repayment performance weakens further. They added that net interest margins could come under pressure if defaults follow after restructurings.

Those considerations make the trend relevant not only for bank earnings, but also for how investors assess asset quality. Analysts noted that restructuring patterns are monitored for early signals on credit risk within the banking system.

Investor focus on asset quality and spreads

Fixed-income investors track restructurings as a lead indicator for bank asset quality and for sovereign funding spreads, analysts said. In their view, shifts in restructuring activity can influence how markets price risk around the broader funding environment.

At the same time, the available data does not specify which loan categories contributed most to the increase, nor how outcomes may differ across banks. Those details, along with whether restructured exposures stabilise or move into default, remain key uncertainties for the next readings.