A jump in bad loans hit Turkish banks’ profits in the last quarter of 2008 after a long period in which they had expanded branch networks and rapidly increased consumer credit and lending to small businesses.

Akbank, Turkey’s biggest lender by market value, reported fourth-quarter net income of TL212m ($128m) after the market close on Friday – below expectations and 39 per cent below the third quarter. Net income of TL1.78bn in 2008 was 15 per cent below the previous year.