‘Turmoil is posing opportunities for Turkish industrialists’
Posted by meb at March 4th, 2008
Opinions are mixed about the global turmoil that started in the US market and spread to Europe, with some economists saying that the fluctuations will hurt many emerging economies, including Turkey’s, and cause a slowdown in the global economy.
However Yunus Nacar, interest-free banking house Türkiye Finans’ general manager, believes the crisis can be converted into an opportunity if the right steps are taken to support and strengthen the industrial sector.“China, which is very involved with the US economy, faced serious problems after the crisis, and serious structural problem arose,” he said, asserting that this was good news for Turkish industrialists in terms of competitiveness. Nacar said Turkey had conducted $250 billion in foreign trade, including more than $100 billion in exports, last year, although a low exchange rate had a negative effect on the figures.
Nacar said Turkish banks are focusing more on financing industrial sector than purchasing financial instruments, another advantage for the Turkish economy. “There are some structural differences between Turkey and the other countries struggling with the crisis,” he said. However, Nacar emphasized that the government and banks have further responsibilities in dealing with the ongoing crisis in external markets. The government should strengthen stability by implementing microeconomic reforms. and the banks should encourage the industrial sector more, according to Nacar.
In an interview with Today’s Zaman, Nacar, who has 23 years of experience in interest-free banking and is one of the rare experts in the field, said the industry plays an important role in getting over the latest financial fluctuations. “If the Turkish banks continue to finance the industrial sector, the banking system may carry on its success this year, too,” he said. “Moreover, I believe we can move forward while other rival emerging countries like China are dealing with their own financial problems.”
Commenting about concerns that the costs of syndication loans may increase in 2008, Nacar said this could be perceived from the opposite perspective. “Until now there were no problems in the repayment of syndication loans and loans used for economic development,” he said, also speculating that perhaps loan issuers would prefer to extend more loans, as Turkey will be a sort of safe haven. Nacar also voiced some of his concerns, saying that Turkey was being treated unjustly with regard to its credit ratings. He noted that some large Western banks could announce huge write-downs, while Turkish banks using their funds in more stable fields still had low creditworthiness. “There is a mistake here, and it must be remedied,” he said.
‘Harmony among Treasury, BDDK, central bank vital’
Nacar said strict regulations implemented by the Banking Regulation and Supervision Agency (BDDK) had contributed significantly to getting over the fluctuations with minimum loss. Again, he said that harmony between the Treasury and the Turkish Central Bank in conducting their business regularly despite outside influences played an important role in keeping the markets relatively stable. “The central bank keeps Turkish economic balances at a healthy point by acting rationally,” he said. Nacar also emphasized sensitivity to risk management, saying Turkish banks had become more careful about risk management following the 2001 Turkish banking crisis. He cited the extra care taken in loan issuance as a good example of this. “The Demirbank case showed that banking is not possible only through government bonds,” he said. Demirbank, which was once one of the strongest banks in the sector, had the majority of its assets in government bonds but collapsed during the 2001 banking crisis.
Nacar said the banks began to diversify their portfolios and rotated to non-financial sectors in parallel with the declining interest rate resulting from political stability.
Nacar also cited as an advantage industrialists becoming more aware in securing loans. He said that in the past businessmen just tried to get loans without thinking much about their eventual repayment, but that now they only take out as much in loans as they will be able to pay back.
Turkiye Finans plans to hire 1,000 new employees
Nacar is one of the first professionals in interest-free financing since it began in Turkey. Working at the four interest-free finance houses, which eventually came to be called participation banks — Faysal Finans, Kuwait Türk, Anadolu Finans and Türkiye Finans — Nacar played an important role in the merger of Anadolu Finans and Family Finans to establish Türkiye Finans in 2005. With its brilliant performance, the bank had attracted the attention of foreign investors and received 15 merger and acquisition proposals. Nacar said they decided to sell a 60 percent stake to Saudi Arabia-based National Commercial Bank (NCB) in July 2007; the sale was approved last week. Nacar also said they would pursue an aggressive growth strategy after the handover process, focusing on human resources and establishing new branches by opening 38 new branches and hiring 1,000 new employees in 2008.
source: Today’s Zaman
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