Turkish regulator tells banks $8 bln in loans are bad loans

Turkey’s financial regulator BDDK instructed the country’s banks on Tuesday to reclassify 46 billion lira ($8.1 billion) worth of loans as non-performing by year end, and to set aside reserves to cover the losses.

The aggressive move is expected to raise banks’ NPL ratio to 6.3 percent from 4.6 percent, BDDK said. It comes a year after Turkey’s currency crisis left its banks with billions of dollars of debt that companies could no longer afford to service.