Thanks to forward-thinking regulation, the Turkish capital market is one of the most innovative in the world but, in terms of volume, it is still relatively undeveloped. Can a government initiative to make Istanbul a leading international finance centre marry this world-class innovation with volumes that will see it compete with the likes of London and Dubai?
Emerging market currencies benefited handsomely from the US central bank’s huge quantitative easing programme. With that now being unwound and with China slowing, emerging currencies are now in retreat. Those from economies with weak fundamentals are especially vulnerable.
The macroeconomic climate is taking its toll on Turkey's banks, with many predicting a difficult year for the industry. Growth avenues still remain, however, in the commercial loans and small and medium-sized enterprise sectors, not to mention the huge potential of tapping the country's large unbanked population.
If the early 2000s were all about the emerging economies of Brazil, Russia, India and China, now attention is shifting to the up-and-coming countries of Mexico, Indonesia, Nigeria and Turkey – the MINTs. And with rapid economic growth predicted, retail banks in these countries will be under enormous pressure to keep up.
Turkey's impressive growth across numerous measures in recent years showed signs of slowing in 2013, and its image was further dented by civil unrest in June and July. However, will a more considered growth strategy be good news for the country's banking sector and investors?
Turkey has set itself some ambitious targets for the next 10 years, not least wanting to become one of the world's 10 largest economies. There are a number of obstacles that it must overcome first, however, with a significant savings gap, a deep current account deficit and a poor record in attracting foreign direct investment.
Vakibank's five-year plan to upgrade its IT infrastructure and completely remake its core banking application is ambitious but, according to CIO Ali Engin Eroglu, it is vital if the bank is to keep pace with Turkey's technology-focused banking sector.
DenizBank's modern, nimble IT system has a series of admirers in the banking world, and includes none other than Bill Gates among those who it has impressed. The bank's chief operating officer tells The Banker how DenizBank is now ready to take its IT knowhow to a wider international audience.
The Banker has identified 13 banks to keep an eye on in the coming year based on a variety of factors. A new entrant to the Turkish market Odea Bank – a subsidiary of Lebanon’s Bank Audi – has set an ambitious target to become one of the top 15 banks in Turkey by the end of 2017, making it one to watch over the next few years.
Turkey’s government wants to establish Istanbul as an international financial hub in time for the country’s 100th anniversary as a republic in 2023. The country's geographical location certainly works to its advantage, but it has much to achieve in just 10 years. Will it succeed?