Big five grab lion’s share of banking profits in 2007
Posted by meb at February 22nd, 2008
Turkish banks have made net profits totaling YTL 14.9 billion in 2007, while leading US and European banks suffered considerable loses due to global fluctuations; more than half the banking sector’s total profit was shared among five major Turkish banks.
Compared to 2006, the Turkish banking sector’s net profit has increased by 31.3 percent, rising from YTL 11.4 billion to YTL 14.9 billion in 2007. The total profit of five banks — Garanti Bank, Akbank, İş Bank, Ziraat Bank and Halkbank — totaled YTL 10 billion, an amount equal to 70 percent of the banking sector’s total profit.
While a mortgage crisis has led US and European banks to announce the largest losses in their history, three private Turkish banks made record profits totaling YTL 6.1 billion in 2007. Garanti Bank, Akbank and İş Bank increased their net profits by 107.6 percent, 29 percent and 53 percent, making YTL 2.4 billion, YTL 2.04 billion and YTL 1.7 billion in net profit, respectively.
The total number of banks operating in Turkey reached 50, including 33 deposit banks, 13 investment banks and four participation banks, at the end of 2007.
Public banks becoming more profitable
Public banks, which have been considered a burden on the budget for many years, have begun to make profits as political pressure ceased. Ziraat Bank increased its net profit from YTL 2.1 billion to YTL 2.4 billion in 2007, while Halkbank’s profits rose from YTL 863 million to YTL 1.1 billion.
The total assets of the Turkish banking sector, which equaled YTL 559.6 billion as of November 2007, increased by 3.9 percent to reach YTL 581.4 billion by the year’s end. According to the Banking Regulation and Supervision Agency’s (BDDK) monthly bulletin, the total banking sector loans were worth YTL 275.3 billion as of November 2007 and rose to YTL 285.7 billion in December 2007 — a 3.8 percent increase.
Global finance giants bore significant loses in 2007. American Citigroup suffered a loss of $18 billion — the largest loss in its 196-year-old history. Another American bank, Merrill Lynch, closed the year with a $7.8 billion loss, while leading Swiss Bank UBS lost $4 billion.
Bank employees nears 160,000
The number of bank branches and employees has increased as the profitability of the banking sector increased by more than 30 percent. Banks including deposit, investment and participation banks have opened up 796 more branches, bringing the total number of branches up to 7,618 as of the end of 2007.
Compared to the end of 2006, public deposit banks, private deposit banks, and participation and investment banks had 54, 43 and three more branches, respectively. The number of bank employees increased to 158,559, a 10.8 percent rise.
Five banks’ profits approx. YTL 15 billion
Banks – Net profit (YTL billion)
Garanti Bank 2.42
Akbank 2.04
İş Bank 1.7
Ziraat Bank 2.4*
Halk Bank 1.1*
Others 5.24*
Total 14.9
* approximate
Source: Today’s Zaman
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