Turkish banks rail against intervention
Macro headwinds, regulatory aggression, competition and new funding structures herald a shake-up in Turkey’s banking sector. Yet with many of the banks’ European shareholders under intense pressure in their home markets, Turkish banking assets have never been so valued. Nick Lord reports.
ON MAY 12, the prodigal son of Turkish banking returned home. Husnu Ozyegin, known locally as the King of Turkish Banking, opened his new bank, Fiba Banka. Comprising 20 branches of the old Millennium Bank bought from Portugal’s Banco Comercial Português, the new bank is part of Ozyegin’s Fiba Holding. The market that Fiba is operating in is very different from when Ozyegin last ran a bank in Turkey. From 1987 to 2006, he built and operated Finansbank, which he sold in 2006 to National Bank of Greece for $5.5 billion. At 3.5 times book value, it was one of the richest bank deals anywhere in the heady pre-crisis days. In the process Ozyegin became one of Turkey’s richest men.
With his non-competition period over, Ozyegin is back. But the market he left in 2006 is very different today. Since the beginning of 2011 pressures on the sector have built up that analysts and local bankers believe will bring big changes to the market. From regulators aggressively limiting growth, to rising costs and increasing competition, to falling prices in government securities and the potential fallout from the eurozone banking mess, Turkey’s banks are under the cosh.