Turkish banks could face risks due to the recent rapid increase in retail credit card lending if credit conditions tighten further or economic growth slows, Fitch Ratings says.

• "Retail credit card lending grew by 162% in 2023, far outpacing inflation and nominal loan growth. The rapid growth continued in 1Q24 (19%). Households have significantly increased their credit card use in the inflationary environment to frontload purchases and to spread their purchase costs over several months by paying in instalments."
• "Unsecured retail lending has grown fast despite various macroprudential measures since Turkiye’s elections in May 2023 to curb inflation, including, until recently, a limit on monthly lending growth. We expect the central bank to pursue tighter financial conditions, aided by targeted bank regulations to cool down consumer and credit card loan growth."
• Full report here.