ISTANBUL: Goldman Sachs, Bain Capital and the European Bank for Reconstruction and Development met on Thursday with Turkish bankers and investors, three sources told Reuters, as Turkey works to pare down its balance of problematic loans.
Foreign investors and institutions interested in non-performing loans (NPL) were to attend the meeting in Istanbul arranged by PricewaterhouseCoopers, the people said, requesting anonymity because they were not authorized to discuss it.
A currency crisis saw the lira fall nearly 30 percent against the dollar last year. That raised the cost of servicing foreign debt to surge resulting in a surge in problematic loans at banks.
Finance Minister Berat Albayrak said last month that Turkey would offer a nearly $5-billion injection for state banks in order to help them improve their balances. He said problematic loans in the energy and construction sectors would be moved to two off-balance sheet funds to relieve banks.
The Thursday meeting is aimed at bringing together domestic and foreign investors to discuss the sale of companies and assets with high debt, one source close to the matter said, adding that potential obstacles and solutions were to be discussed.
Asset management companies and portfolio managers will join the meeting, as well as the International Finance Corporation and the International Bank for Reconstruction and Development, high-ranking banking officials and foreign funds, the source said.
"International investors will discuss the process of transferring bad loans which is being planned by banking officials and the government," another source said.
Reuters had earlier reported that Wall Street bank Goldman Sachs Group Inc, Japanese financial services group Orix Corp, and U.S. private equity firm Bain Capital were in talks with Turkish banks and companies to buy large distressed loans.
The loans in Turkey's banking sector amount to 2.5 trillion lira as of end-March, with 100 billion lira re-structured. The NPL ratio stands at 4.04 percent and is generally expected to rise to 6 percent by year-end, though some analysts predict it could double to 8 percent.
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