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Turkey's once crisis-prone financial sector is probably more robust than ever. That is partly thanks to the restructuring and growth of the economy as a whole, and the growth in deposits and consumer financial products. Substantial foreign investment has also begun in the sector, including UniCredit and Koc Financial Group's acquisition of Yapi Kredi Bank in May.
Akbank, the winner of the best bank in Turkey award, has been well positioned to take advantage of the economy's excellent performance. With its strong capital position – its capital adequacy ratio was 33% as of the first quarter of 2005 – it has managed to increase its Turkish lira-denominated loan portfolio by 70%, its SME loan portfolio by 131%, and its credit card business by 120%.
These consumer and SME loans have offered better returns than government securities, with an average yield of over 30%, so the boom in consumer lending has the added advantage of decreasing the bank's reliance on government securities for profit. Thanks to this growth, net income was up 32% in the first quarter of 2005, and return on equity was 22.7%.