For family and the state

With proliferation rather than consolidation the driving force, banking in Turkey is running counter to the international trend. Although the country was already overbanked, in the past decade the government has allowed 10 new banks to start up. In addition, three new banking permits were issued recently and more than 20 applications are pending before the treasury. There is a strong likelihood that these will succeed. Government ministers in charge of the economy constantly stress the need for banking consolidation through mergers but in practice the opposite is encouraged.

Banks are coveted because they serve to finance shareholders' non-banking businesses. "The main attraction is that a bank can be the shareholder piggy-bank kitty," says an American banker. "The beauty of it is that others put in the money...