Turkish banks: Growing pains
Growth at double and triple digit rates can be almost as much of a curse as a blessing. The problems range from considerations of quality, which can often take a back seat when loan portfolios are growing at more than 50% a year, to the logistical challenges of processing twice as many loan applications as the year before.
“Growing our loan book by 70% last year was a massive logistical challenge for us,” says Hayri Çulhaçi, executive vice-president in charge of strategic planning at Akbank. “Consumer loan growth has been even greater, at over 100%. Last year our housing loans grew to $1.4 billion from almost zero just two years ago. In the 1990s we dealt with commercial loans, small business loans and credit cards, all through out branch network. But we anticipated rapid growth at these rates and rolled out an efficient technology infrastructure to centrally process these.”
Despite such phenomenal growth Akbank has managed to keep its all-in non-performing loans ratio at just 1.6%. Its ratio for car loans and housing loans is less than 1%, while for small businesses it is 2.5%.