Turkey's central bank announced net profit earlier than usual

SoL columnist Kadir Sev evaluated the recent development that Turkey's central bank announced net profit earlier than usual, raising the question whether the amount to be transferred to the treasury from the net profit is planned to be used for the upcoming elections
Monday, 25 February 2019 13:36

Turkey's Central Bank posted 56.2 billion Turkish liras ($10.7B) net profit for the year 2018. 

The Central Bank's profit is determined in the first quarter of each year. The General Assembly meets in April in accordance with its principle agreement. The assembly, in principle, decides to distribute the profit among the stakeholders, not exceeding 12 percent, and to transfer the remaining to the Treasury.

This year, this process was run differently due to the economic crisis, shortage of cash and upcoming local elections on March, 31. 

The General Assembly held an extraordinary meeting in January. The principal agreement was amended and it was decided that the general assembly meetings would be held in the first quarter of each year. In the first nine months of the year, an estimated 37 billion liras ($7B) profit was calculated and 33.3 billion liras ($6.25B) were transferred to the Treasury in January. 

According to the bank's balance sheet announced recently, the net profit posted is 56.2 billion liras, which is approximately 19 billion liras ($3.6B) more than estimated.

The announcement of the balance sheet in February is not usual. Last year, the balance sheet was published on March 27, 2018.  This change may have been made in order to transfer new funds worth 19 billion liras to the treasury. 

In 2016, the Central Bank announced a profit of 9.5 billion Turkish liras and transferred 6.4 billion liras to the Treasury. In 2017, a profit of 18.3 billion liras was announced and 12 billion liras were transferred to the Treasury. According to the balance sheet announced in 2018, more than 50 billion liras can be transferred to the Treasury.