Turkey: Domestic potential breeds foreign sceptics

Dominic Dudley
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Turkish banks have always been cautious about foreign expansion. They see too much opportunity at home to consider big investments overseas. But will the growth in Turkey’s international trade force them to broaden their horizons?

Turkish banks are not a well-travelled group of companies, generally preferring the assured comforts of their home market to taking the risk of stepping out into the wider world. But as Turkey increasingly flexes its political and economic muscles on the world stage, and as domestic growth start to slow, could the country’s banks become more adventurous?

There are 44 banks in the country according to the Banks Association of Turkey. Between them they have more than 10,000 branches, but just 76 of these are abroad. On top of that a number of banks have international subsidiaries and representative offices in key overseas markets, but the figures nonetheless offer a clear indication of just how cautious Turkish banks have been.

It is not hard to see why. The Turkish banking market is profitable and has been growing at a healthy rate, so it makes sense for institutions...