Turkey Finance Profile 2012

Turkey’s significance on the world finance stage is on the rise. The financial capital of the country, Istanbul, with its rich and vibrant economy, is now slated to become a World Finance Center. The established banks and financial institutions in Turkey, 24 with foreign capital out of an active 49, operate with 9,328 branch offices that offer a variety of services to their customers in every aspect of banking. (As of September 2009)

Meanwhile, a total of 54 local and international insurance companies are currently active in Turkey, where both individuals and corporations can benefit from life, health, housing, business and traffic insurances.

Financial Services

Turkey’s financial sector is still in a development stage with financial services ready for further expansion, driven by solid economic growth along with declining interest rates and inflation. According to the Turkish Banking Regulation and Supervision Agency (BRSA), as of September 2008, the asset size of the Turkish financial sector increased by 15.6 percent when compared to the previous year. As regards asset sizes, 76.4 % of assets belong to the banks, meaning that the financial services’ market, in particular the credit sector, is dominated by the banks. Looking into the outstanding securities; the capital markets are largely occupied by the government securities. The Turkish insurance sector is also rapidly flourishing and expected to gain new momentum with the Insurance Law that was enacted on June 14, 2007.

• Despite the global financial crisis, Turkey’s banking sector remains sturdy and profitable.
• Turkish financial institutions were not exposed to “toxic assets” caused by the financial crisis.
• The regulatory bodies have improved steadily since 2001 and the economy has grown to be resilient to both domestic and external financial fluctuations.
• The Central Bank of the Republic of Turkey (CBRT) has effective instruments for managing liquidity and flexibility to provide emergency lending assistance.
• There are 45 banks operating in Turkey and 21 of them are foreign deposit.
• nderpinned by expectations of steady economic expansion, growth and age structure of the population, urbanization, the ongoing reform and professionalization of the financial sector and the relative improvement in economic stability, the Economist Intelligence Unit (EIU) expects credit growth to increase 25 percent per annum during 2010-2012 period.
• The international and Turkish investors are subject to the same conditions and permits.
• Turkey’s financial market is highly liberalized.
• The Istanbul Stock Exchange (ISE) only began its operations in 1986, but it grew quickly to become one of the top emerging market exchanges of the world.
• In 1993, the ISE was the best performing stock market in the world, and foreign investment accounted for 25 % of daily trading volume.
• According to ISE, around 65 % of the total value of the traded stocks is held by foreign investors as of September 2009.

* The Istanbul Financial Center Project is set to make Istanbul a regional financial center within ten years and a global center in a few decades.
* The Turkish government continuously works on improving the Turkish tax system, legal and fiscal environment, political and economical stability and the regulatory framework in order to attract financial investments.