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Banks in Türkiye drove the strongest credit expansion among emerging market lenders in the first half of 2025, as developing Europe posted a 31 percent year-on-year increase in gross loans, far outpacing peers across other regions, according to new data from Fitch Ratings.
The findings come from an updated edition of Fitch's Emerging Markets Largest Banks Monitor, which tracks 142 major banks across developing economies with combined assets exceeding $48 trillion. The dataset largely overlaps with banks featured in JP Morgan Chase & Co's Corporate Emerging Markets Bond Index (CEMBI).
Across the full sample, average credit growth rose 12 percent year-on-year in the first half of 2025. Developing Europe, led by Türkiye's banking sector, posted the highest growth at 31 percent, more than double the broader emerging market average.
Latin American banks recorded a more modest 8 percent increase in gross loans, driven primarily by several Brazilian lenders. However, the region's deposit base contracted by 2 percent over the same period, a divergence that could signal growing funding pressures.
Net interest margins across emerging market banks remained broadly stable at 4.2 percent during the first half of the year. While most regions saw slight declines in average margins, African banks bucked the trend with margins rising to 6.2 percent, the highest among all regions tracked.
Emerging market banks continued to rely predominantly on deposit funding, with an average loan-to-deposit ratio of 103 percent at the end of the first half of 2025. The regional spread, however, was significant.
Latin American banks carried the highest average loan-to-deposit ratio, which climbed from 117 percent at the end of 2024 to 127 percent. African banks sat at the opposite end of the spectrum, recording the lowest ratio at 66 percent, reflecting comparatively ample deposit buffers relative to lending activity.
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