Turkey Financial News

Posted by meb at November 27th, 2008

Kuveyt Türk, the first and only participation bank authorized to make transactions in Turkey’s gold exchange, posted $69.4 million in profits in the first nine months of the year, a statement from the bank has said.

The bank’s profits in the first three quarters of 2008 represented a 53 percent increase over the same period last year, while its equity has reached $541 million, up by 71 percent compared to last year. Its assets also climbed by 28 percent, reaching $4 billion. (more…)

Posted by meb at November 26th, 2008

Turkey’s state-owned Halkbank will provide 700 to 750 million YTL ($445- 480 million) to the economy, Bank Chief Executive Huseyin Aydin said on Wednesday.

The bank would secure $200 million of funding from the World Bank and 300 million euros from the European Investment Bank and had already used 80 million euros from the French development agency, Aydin said at Ankara Chamber of Commerce meeting.

Halkbank had earlier this month announced that it would loan 1.5 billion ($900 million) to Small and Medium size Enterprises (SMEs) during the coming period following the government’s decision to supply low-cost credit to small businesses. (more…)

Posted by meb at November 25th, 2008

Thanks to its solid banking system, Turkey is a substantial financial market despite a difficult global environment, according to Clare Dawson, executive director of the Loan Market Association. But funding from Europe will be increasingly harder

Turkish banks are considered safe and reputable players in world markets despite the current financial turmoil, according to the Loan Market Association of London.

The Loan Market Association, or LMA, founded in 1996 by seven leading banks in London, organized a training event regarding the current conditions of the European loan markets and their activities.

The association, which has over 400 members including banks, law firms, institutional investors and information providers, aims to encourage liquidity and efficiency in loan markets by promoting market depth and transparency, developing standard forms of documentation and codes of market practice. (more…)

Posted by meb at November 24th, 2008

Despite a huge potential client base, Germany has proven reluctant to adapt its legal and tax systems to attract Islamic finance, which has enjoyed stellar success in Britain.

What sets Islamic finance apart from other banking systems is that no interest is collected on loans. The risks and rewards are shared between the bank and the client and debt levels are carefully monitored.

In recent years, Islamic finance has grown exponentially in the Middle East, Southeast Asia and Britain. Global assets held by Islamic banking institutions stood at nearly $500 billion in 2008, compared to $260 billion in 2004.

With some 3.5 million Muslims, mainly of Turkish origin, Germany offers enormous potential demand for banks providing retail Islamic financing, said Zaid el-Mogaddedi, president of the Institute for Islamic Banking and Finance in Frankfurt. (more…)

Posted by meb at November 24th, 2008

Numerous banks are dismissing employees to slash costs amid the global financial crisis, with some filing for bankruptcy, but the banking industry in Turkey is continuing to move forward without losing pace.

Figures from the Turkish Banks Association (TBB) indicate that the number of bank offices and branches throughout Turkey and the Turkish Republic of Northern Cyprus (KKTC) increased by 926 to 8,544, with the number of bank workers edging up to 170,425 — including 11,891 new recruitments — in the first nine months of this year. The only news overshadowing this healthy picture occurred when Akbank laid off close to 1,700 workers last week. Although Akbank has officially declined to confirm the dismissals, anonymous sources from the bank said the job cuts had nothing to do with the crisis but were taken as part of a wider restructuring plan. (more…)

Posted by meb at November 20th, 2008

The global credit crunch is also affecting Turkish banks, as they restructure and try to curb borrowing. Banks expect to pay a spread of about 2 percent over the London Interbank Offered Rate, as lending from Europe becomes increasingly harder. Meanwhile, three executives of Akbank step down.

As a recent report on the Turkish banking sector outlines the challenges brought in by the global financial crisis, banks are trying to adapt, restructure and trying to curb foreign borrowing in the face of rising lending rates.

The near-term outlook for Turkish banks is ’challenging,’ according to a report released by Fitch Ratings on Tuesday. Though international funding and foreign exchange risks are well contained, there are some significant risks for Turkish banks in this period of global de-leveraging, a deteriorating global economic growth outlook and scarce funding, Fitch said in its report. These risks include “the negative impact of the expected economic slowdown and the impact of rapid loan growth on asset quality, capitalization and profitability.” (more…)

Posted by meb at November 18th, 2008

Turkey’s unemployment rate stood at 9.8 percent in August, a 0.6 percent rise from July, and is likely to rise further as companies such as one of Turkey’s largest banks, Akbank, lay off staff.

The latest Household Labor Survey, released yesterday by the Turkish Statistics Institute (TurkStat), showed an increase in unemployment in urban areas of 0.4 percent to 12 percent and hitting 6.3 percent in rural areas. The number of unemployed people in Turkey is now 2.43 million, the institute said. (more…)

Posted by meb at November 15th, 2008

The number of legal proceedings seem to be rising paralel to the number of people who are unable to pay off the loans they have obtained from banks. As a result of drastic measures taken by Turkish banks to collect their money, motor vehicles begin to pile up in bank parking lots

Certain banks have begun to take drastic measures in an attempt to recuperate out-standing debts.

Banks that have already put the brakes on granting loans due to the credit crunch are also closely monitoring loans they issued before the freeze. The parking lots of Turkey’s banks, especially the ones located in smaller cities, are overflowing with impounded vehicles of people unable to make their car loan repayments. The number of vehicles repossessed by banks has risen by 60 to 70 percent.

Other financial institutions, besides banks, are also painting a similar picture. The number of vehicle owners Volkswagen Doğuş Tüketici Finansmanı, or VDF, a consumer financing company, is planning to pursue legal proceedings against rose nearly 100 percent compared to a year and a half ago, said Kemal Ören, managing director of the firm. (more…)