...The Turkish leasing sector is fairly underdeveloped compared with the banking sector as a whole. Leasing sector assets accounted for just 1.8% of total banking sector assets at end-2017. At end-2017, the lease book was mainly split between construction (26%), production (26%) and textile (15%) machineries. An additional 19% came from real estate (almost all sale and leaseback transactions). A 1% upward/downward change in interest rates would have resulted in a small 2% decrease to Alternatif Lease's equity. Alternatif Lease's net open currency position was a moderate 5% of total equity at end-2017. Margins could narrow further given that growth is set to focus on lower- yielding, albeit larger and less risky, commercial clients in line with Alternatif Bank. A moderate 2.8% of leases were overdue by more than 90 days at end-2017. The monthly amortising repayment structure of leases means asset- quality problems are quickly detected. The equity/assets ratio (9.6%) is above the 3% regulatory...
