Lending: Total loans grew by 0.9% w/w and in detail TL loans grew by 1.2% w/w and FX loans declined by 0.2% w/w. TL loan growth was mainly driven by corporate, commercial installment loans, credit card loans, which grew by 1.5%, 2.3%, and 1.1% w/w, respectively, while consumer loan growth remained weak at 0.5% w/w. 

Deposits: Total deposits grew by 0.3% w/w as TL deposits rose by 1.1% w/w, while FX deposits declined by 1.2% w/w. The loans to deposits ratio rose by 60bp w/w to 100.6%, mainly on the back of the deterioration in the FX loans/FX deposits ratio, which was up by 74bp w/w to 76.1%. 

Credit Quality: The gross NPL ratio rose by 2bp w/w to 3.0%, while the NPL coverage declined by 69bp w/w to 74%. In Y-t-d terms, deterioration in the gross NPL ratio stood at 14bp. 

In order to make references for the macroprudential measures we had a look at the growth trend for credits. We calculate that: 

_The FX-adjusted growth trend (annualized 13-week average credit growth) in total credits, excluding loans given to the financial sector edged down to 19.6% as of March 1 vs. the preceding week's 19.8%. 

_The FX-adjusted growth trend in consumer credits softened to 21.5% as of March 1 from the previous week's 22.6%. 

_The trend growth in commercial credits continued rising slightly to 19.3% from 18.9% during the same period. 

Obviously, the trend growth for credits is still above the CBT's 15% year-end guidance and the chance for further macroprudential tightening going forward has been maintained. More importantly, based on seasonality, there is the risk of a further acceleration from April onwards up until the third quarter, which may threaten the CBT's year-end guidance with an even greater margin. In essence, the downtrend for the average interest rates charged on consumer loans and commercial loans seems to have abated. This may help to avoid a further acceleration in credit growth beyond seasonality, yet tightening in credit standards would be better for the CBT's financial stability objectives. We will observe two more credit growth data before the March MPC meeting and will shape our call regarding the reserve requirement ratio decisions accordingly. 

Ideally, the CBT would prefer faster commercial credit growth and slower consumer credit growth. In that sense, the current decoupling of the growth patterns in the two segments is positive, albeit it is very slow. 

Digging further into the details, the growth trend in the general purpose loans remains elevated, while it softens in the consumer credit card segment. These segments are least preferable from the financial stability and growth stability perspectives. Overall, the improvement is quiet gradual and may not be convincing, especially considering that the decline in the interest rates charged on these types of loans has hardly ended yet. This would imply that the banking watchdog BRSA would keep a close eye on the loans and would step in if the improvements lose pace or if they are reversed. Both the BRSA and Deputy PM Babacan have already hinted that they may implement measures that would discriminate for loan types in favor of the non-consumer segment.