“It was deemed appropriate to cover up to 10% of the net profit for the year 2020 within the framework of the special circumstances of the banks.” By Reuters

ANKARA, 29 January (Reuters) – Banks Association (TBB) stated that it would be beneficial for banks not to be subjected to profit distribution in a way that would result in cash outflows in their profits and reserves kept under equity with the profits to be made in 2020, but within the framework of special circumstances of banks, 10% of 2020 net profit announced that it is deemed appropriate to meet the demands of profit distribution.

In the TBB’s statement, it was reminded that the Banking Regulation and Supervision Agency (BRSA) does not allow 2018 and 2019 profit distribution in the banking sector with a prudent approach to ensure that equities remain strong, taking into account the possible risks to be experienced due to the developments in global markets and the epidemic.

The statement said:

“Similarly, it was evaluated by the Authority that it would be beneficial not to distribute the profits to be made in 2020 to the shareholders and the profits and reserves that were obtained before 2020, but were not subject to distribution and kept under equity, in a way that would cause cash outflow.

However, it has been deemed appropriate to meet possible profit distribution demands up to 10 percent of the net profit of the year 2020 within the framework of the special circumstances of the banks, especially the capital adequacy ratio. “

In the statement, which stated that basic banking performance indicators are at the levels envisaged by regulations and close to international averages, “Within this framework, allowing a prudent redistribution of profit, as in international practices, is considered positive for the banking sector, investors and our markets.” It was said.

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