Banking
From The Report: Turkey 2015
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Turkey’s banking sector has proved resilient in the face of both the global economic crisis and more recent fluctuations in the economy. Loan growth remains fairly high by developed-market standards but has fallen in recent years, reflecting the market’s increasing maturity as well as regulatory moves to contain credit expansion with an eye on risk profiles. In the medium to long term, the market should benefit from the large population, the scope for growth in a country with moderate levels of banking penetration and the expansion of a diversified economy. The outlook for the longer term remains positive. Turkey is one of the world’s largest emerging economies and has a sizeable and growing population and a diversified economic base. The continued entry of new players to the market is indicative of the sector’s potential.

This chapter contains interviews with Erdem Başçı, Governor, Central Bank of the Republic of Turkey; Ali Fuat Taşkesenlioğlu, CEO, Halkbank; Suat İnce, Deputy Chief Executive, Türkiye İş Bankası; and Hikmet Ersek, President and CEO, Western Union.

Articles from this Chapter

Overview

Turkey’s banking sector sufficiently well-capitalised to deal with foreign exchange exposure
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Turkey’s banking sector has proved resilient to both the global economic crisis and more recent fluctuations in the country’s economy. Loan growth remains fairly high by developed-market standards but has trimmed in recent years, reflecting the market’s increasing maturity as well as regulatory moves to contain credit expansion with an eye on risk profiles. In the medium to long term, the market should benefit from the large population, the scope for growth in a country with moderate levels…

Interview

Erdem Başçı, Governor, Central Bank of the Republic of Turkey (TCMB)
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Interview:Erdem Başçı How will tapering of the US Federal Reserve’s quantitative easing programme affect Turkey’s economy? What is being done to prepare for this? ERDEM BAŞÇI: The Fed’s signals on tapering quantitative easing since May 2013 have increased volatility in the global appetite for risk and caused capital to flow out of emerging economies. As of the first quarter of 2014, capital flows to emerging markets, particularly in portfolio investment, remain weak. Most emerging-market…

Interview

Ali Fuat Taşkesenlioğlu, CEO, Halkbank
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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.…

Analysis

Shake up in Turkey’s banking sector as some international banks exit while others explore entry
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The foreign presence in the Turkish banking market is currently undergoing a shake up, with new entrants arriving looking to expand their presence in a large and dynamic emerging market, while others are looking to pull out due to external pressures. Raising the Stakes In 2011 Spain’s Banco Bilbao Vizcaya Argentaria (BBVA) bought 24.9% of Garanti Bank for €4.4bn. In November 2014 it raised this stake to 40% for an additional €2bn, giving it control of the bank’s board (with seven of 10…

Interview

OBG talks to Suat İnce, Deputy Chief Executive, Türkiye İfl Bankası
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Interview: Suatİnce How important is foreign investment to the Turkish economy? Why should multinationals consider Turkey an attractive market in which to invest? SUAT İNCE: Over the past decade, foreign direct investment (FDI) in the Turkish economy has risen considerably. As one of the fastest-growing economies in the OECD, Turkey has attracted more than $140bn of foreign capital in the last 10 years. Indeed, Turkey has climbed two spots in the 2015 AT Kearney FDI Index and is ranked…

Interview

Hikmet Ersek, President and CEO, Western Union
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Interview: Hikmet Ersek How is Turkey seen by global financial firms looking to expand their operations in the region? HIKMET ERSEK: Half the population in Turkey is under 30, and they are very tech-savvy – the country ranks 18th in the world by number of internet users, and 66m people have mobile phones out of a population of 77m. Banks and other financial institutions in Turkey and around the world are looking for innovative ways to attract new customers and retain current ones. Many are introducing…

Analysis

Rapid credit growth in Turkey leads to growing ratio of bad debt and NPLs in the banking sector
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As the IMF and others have noted, the Turkish banking system’s non-performing loan (NPL) ratio is relatively low, despite the recent economic slowdown and foreign exchange risk. The ratio varies across the sector, however, with some banks more susceptible than others. While NPLs are not high by regional standards – and even by those of some eurozone members – and are well-provisioned, analysts and sector players have become increasingly aware of the risks of a rising ratio to balance sheets.…

Analysis

Turkey’s banks well-capitalised despite large foreign currency liabilities and negative ratings outlook
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International ratings agencies keep a close eye on Turkey’s banking sector, given its size and importance, and the penetration of major foreign investors. Ratings movements can affect the borrowing costs of Turkish financial institutions and, at a time when Turkish banks have taken on substantial foreign debt, can be a gauge of the borrowing costs they are likely to bear. Political Risk In April 2015, Moody’s Investors Service reported that it would be maintaining a negative outlook for Turkey…