Banking
From The Report: Turkey 2013
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The Turkish banking sector has suffered from a pattern of booms and lulls in the past, and, as a result, a number of policy reforms have been instituted to improve regulation. The sector looked to be starting a process of maturation in 2013 as it continued to record solid growth without overheating, with lending growing at an annualised rate of 16% in the first two months of 2013. The efforts being made by bankers and regulators to take the long-term view, when markets are putting little pressure on them to do so, bode well. Lower inflation, higher domestic savings, focus on SME lending and longer-term foreign financing will make Turkish banks more resilient and able to fund larger projects. But, as the country enters a middle-income stage of development when economic growth usually becomes harder, banks will need to pay close attention to loan quality.
This chapter contains an interview with Erdem Başçı, Governor, Central Bank of the Republic of Turkey, as well as a banking dialogue with Hakan Ateş, CEO, Denizbank and Süleyman Asla, CEO of Halkbank.

Articles from this Chapter

Overview

Looking ahead: The sector is ready for growth after coming through the economic crisis relatively unscathed
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The banking sector looked to be starting a maturing process in 2013 as it continued to record solid growth without overheating. Amid abundant global liquidity, a moderate revival of global growth and improving domestic confidence, lending grew at an annualised rate of 16% in the first two months of 2013, roughly matching the pace of growth in 2012, according to the Banking Regulation and Supervision Agency (BDDK). Most forecasters were expecting a moderate acceleration closer to 20% lending growth…

Interview

Going strong: OBG talks to Erde M Basci, Governor, Central Bank of the Republic of Turkey (CBRT)
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Interview: Erde M Basci What is the ideal growth rate for Turkey’s economy, and how can the CBRT help achieve this rate? ERDE M BAŞÇI: There are three factors that determine a country’s growth potential: price stability, financial stability and productivity. Any weakness in these three areas may cause considerable damage to growth. The real costs of inflation are well known and economists estimate a growth cost of 0.25 percentage points for every increase of 10 percentage points in inflation.…

Interview

Driving force: OBG talks to Hakan Ates, CEO, Denizbank, and Süleyman Aslan, CEO, Halkbank
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Interview: Hakan Ates,Süleyman Aslan In what way did reduced economic growth in 2012 affect the balance sheets and the quality of assets held by domestic banks? ATEŞ: First, prudent risk management has allowed local banks to keep non-performing loan (NPL) ratios at low levels. Although Turkey’s economic growth rate dropped markedly from 2011 to 2012, NPLs only rose from 2.7% to 3%. The system is extremely transparent, and regulation is very tight relative to Basel II or even Basel III…

Analysis

Sitting on a gold mine: Heavy investment in precious metals means lots of potential
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To gain some understanding of the special place that gold holds in the hearts of Turks, one need only visit one of Istanbul’s most famous sites, the Grand Bazaar. Sellers come to cash in their gold jewellery, and buyers leave with anything from gold gram wafers to chunky 100-gram bars that cost more than $5000 a piece. The rest of the bazaar goes through high and low seasons, but the gold quarter bustles all year long. Pot of Gold Nobody knows how much gold Turkish households have managed to…

Analysis

Enough to go around: Lending is on the rise in a number of segments
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Restrained by a cautious central bank governor and chastened by rising non-performing loans (NPLs) in the consumer segment, Turkish banks are maintaining a relatively moderate pace of lending growth in 2013. Although global financial conditions loosened dramatically in late 2012 and early 2013, Turkish banks were expected to increase loans by 15-20% in 2013, around the same pace or a little faster than in 2012, when lending growth was held back by the European crisis. The pace of lending growth…

Analysis

On the international stage: Local players retain a large share, but global players remain interested
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It was once thought inevitable that Western multinational banking groups would come to dominate the banking sector in Turkey, as they have in many peer emerging European countries. But five years after the global financial crisis, those groups’ demands for larger acquisitions have hardly recovered, and Turkey’s banking sector is moving on. As the banking sector grows into a regional powerhouse, ownership is stabilising. Local business groups, multinationals and the Turkish state are all planning…