Turkey has been a magnet for international bankers over the past few years. Twenty fully or partially owned banks now operate commercial or investment banks in Turkey and another 48 have representative offices. The high profile deals include HSBC’s purchase of Demirbank, Fortis Bank’s purchase of Disbank, BNP Paribas with TEB, General Electric’s $1.8bn stake in Turkiye Garanti Bankasi, National Bank of Greece’s purchase of 46% of Finansbank, a bank that Citigroup was interested in.
With 72 million people, an expanding economy and a growing middle class, it is easy to see why Turkey should be attractive as a banking opportunity. But now these bankers need some help from the EU if the value of their investments is to be fully realised.
Troubles in the Middle East – the occupation of Iraq, the Israel-Lebanon crisis – play badly in Turkey where sentiments have turned strongly anti-American. Turkey’s model of secular democracy has a reasonable track record but tensions from extreme religious groups are never far away.
Awaiting membership
The forces of modernity in Turkey need help not hindrance from the EU. They are hardly getting it. The hesitant approach to Turkey’s membership negotiations is a cause for concern and they may drag on for 10 years or more.
On the Cyprus issue, Turkey feels it was not treated evenly following the Turkish Cypriots support of the UN Peace Plan in April 2004.
Other banks are looking at Turkey and some say that the days of national banking are already numbered. Investors have taken the plunge and ultimately the risk of how things turn out is theirs. But it would be helpful if the EU engendered a more enthusiastic Turkey programme to counter the fallout from the various Middle Eastern crises.
