Turkey gets a foreign bank makeover
Turkey’s open-door approach to foreign investment is paying dividends, with international banks helping to boost balance sheets and widen the range of products and services in the sector. Guy Norton reports from Istanbul.
ONCE UPON A time the Turkish banking sector was exactly that – almost entirely Turkish in character. In the 1980s there were only a few foreign banks in the country’s financial services sector, which comprised a mix of state and private ownership with a collection of large universal banking institutions and small-sector specific players. Nowadays the banking scene is much more cosmopolitan, with a wide range of banks from across the globe pursuing increasingly aggressive expansion plans to take advantage of an improving economic climate and the consequent increase in the so-called bankability of Turkey’s large and fast-growing population.
International bank participation in Turkey is also being driven forward by the country’s growing political significance – poised to become the most populous country in the European Union within the next 10 years and having a strategic geographical position as a bridge between the developed markets of western Europe and the emerging economies of the Caucasus and central Asia.
The net effect of recent political-economic developments is that Turkey is not only seen as an attractive investment destination in its own right but also as a launch pad for accessing the markets of the former Soviet Union, where a wide range of Turkish companies are already taking advantage of strong historical, cultural and trade links to establish themselves as major players.