Interview: Ali Fuat Taşkesenlioğlu
How did recent changes in the global macroeconomic landscape affect Turkish banks?
ALI FUAT TAŞKESENLİOĞLU: In 2014 the global economy continued on a path to normalisation, with the US economy signaling a strong recovery and the EU displaying stable growth figures. Tapering by the Fed and easing of concerns about a possible drop in liquidity abundance in emerging countries gave way to relief after the European Central Bank initiated monetary expansion. These developments led to lower global economic growth figures compared to previous years, but the Turkish economy continued to perform soundly during this period, thanks to the resilience acquired as a result of consistent economic policies over the last decade.
Global economic developments affected the banking industry’s profitability between the end of 2013 and the first quarter of 2014. However, we project general economic recovery to bring a turn for the better and lead to improved profit margins. We expect positive profitability results in the Turkish banking industry in 2015. With its continued growth performance, we are confident that the Turkish banking sector will continue to maintain its influence on the international markets.
Can Turkish banks handle further external shocks?
TAŞKESENLİOĞLU: The Turkish economy is pushing forward with successful growth figures and, as a result, it has become a major global actor. Turkey has gone through an economic restructuring, after its economy and banking sector received a serious blow in the 2001 crisis. Following restructuring, Turkey achieved stable results and escaped the global economic crisis of 2008 unscathed. We believe that thanks to sound balance sheet management, Turkish banks will continue operating, with nominal impact from global fluctuations.
How are banks diversifying their loan portfolios to lend to small and medium-sized enterprises (SMEs)?
TAŞKESENLİOĞLU: We focus our solutions on the main product categories designed to facilitate trade, guarantee collections, improve productivity, cut costs, encourage capacity increases and new investments, and provide assurance for entrepreneurs who cannot secure collateral, and we also offer loans to new establishments. Our support is not limited to our own resources: we provide SMEs with funding from abroad, through protocols signed with international finance institutions, such as the European Investment Bank and the World Bank.
Creating platforms to support the growth of the SME segment has been an industry priority. Developing a strong, well-rounded and diversified SME segment will benefit Turkey in the long-run, as being over-reliant on any single or even a few industries is risky, especially in times of uncertainty. Concrete steps have been taken which affirms the industry’s efforts in harmonising lending portfolios among the retail, corporate and SME segments. Accordingly, banks have begun to renovate service platforms, most notably online, with SMEs in mind. Online advancements have made it easier for customers to apply for SME products and services.
Another area of improvement is direct consultation, where there is a dedicated SME support team offering advice on matters including business operations, legal issues, taxes and more. Numerous deposit and investment products are also available to increase deposit rates and encourage account holders to invest their savings in banks. We believe that it is critical for consumers to analyse their risk profiles when determining the most suitable savings instrument.
How are banks becoming more sophisticated and diversified, and where are they investing?
TAŞKESENLİOĞLU: There is a transformation taking place in every industry and it is crucial to stay dynamic to achieve success, and banking is no different. Technology offers new opportunities with each passing day. Today, the industry is flourishing as it focuses on technological innovations. Accordingly, banks are investing in technology, and alternative distribution channels are currently taking the lion’s share of banks’ investments.
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