The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Banks beholden to the state

Turkish banks have become the debt-raising branch of the government. Estimates suggest that between 40% and 50% of the total assets of the banking system are treasury bonds denominated in Turkish lira or Eurobonds. This ratio is in reality larger than it appears because the bulk of banks' assets are not cash but real estate and shares in non-bank affiliates. Loans to businesses constitute no more than 15% to 20% of assets, according to Global, an Istanbul-based securities company.

Akbank, Turkey's most profitable bank, is a good example. Its total assets in 2002 were TL25 trillion ($15 billion). Of this, 49% was invested in government paper. Loans were TL6 trillion, less than a quarter of assets. In the two state banks, Ziraat and Halk, investments in government paper were an astounding 56% and 73% respectively at the end of the third quarter of 2002.

Borrowing rate inflation Hayri Culhaci, an Akbank executive vice-president, says that there is no way loans to the private sector will grow so long as the economy is depressed and the government's borrowing requirement remains overpowering. "You know that most of the companies that want to borrow are those that will not be able to pay," he says, because the economy has been in turmoil since 1999.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree