The banking sector is leaner and meaner and, as the economy recovered after 2001, has been in a position to take advantage of the demand for consumer loans, particularly for cars and white goods. This demand grew through 2004 and 2005 although there was also an increasing demand for housing loans and for loans for the commercial and small and medium-sized enterprise sectors.
BRSA figures for year-end 2005 suggest that consumer loans as a percentage of total loans have grown from about 14% in 2002 to more than 30% in 2005, with no hint of demand relaxing. Banks have also grown their Turkish lira balance sheets more rapidly than their US dollar ones as the yield and real interest rates on local currency business have historically been higher.
This demand has sparked network expansion, especially among the private sector banks, which fear they might lose out to the large public sector banks. The latter already have large nationwide networks covering rural areas and market towns, particularly in the eastern region, which the private sector had previously neglected. One advantage that private sector banks have in handling an aggressive branch expansion programme is their advanced technology.
These opportunities for growth have not gone un-noticed outside Turkey. In 2005 and the first half of 2006, BNP Paribas acquired a 50% stake in the controlling shareholder of Turk Ekonomi Bankasi; Fortis acquired Disbank, which was immediately rebranded to Fortis; UniCredit acquired a 50% interest in Koç Financial Services, the immediate parent of Koçbank, which then acquired Yapi ve Kredit Bankasi; and General Electric acquired a 25% stake in Turkiye Garanti Bankasi. In similar vein, National Bank of Greece acquired 46% of Finansbank and has subsequently launched a public offering for the remainder; Bank Hapoalim (Israel) acquired 67% of C-bank; Dubai Islamic Bank bought MNG; and agreements are in place for EFG Eurobank (Greece) to acquire 70% of Tekfenbank; Dexia (Belgium)
to purchase a 70% stake in Denizbank; and Bank TuranAlem (Kazakhstan) to buy a 34% share in Sekerbank.
Needless to say, HSBC was ahead of the game when it picked up Demirbank in the immediate wake of the 2001 crisis.
