This guide looks at the banking system in Turkey, and how you can choose a good bank to use. It covers both domestic banks and international (offshore) banking.roduction
National banking in Turkey
There are quite a number of banks operating in Turkey. Almost all are now foreign owned. TEB is owned by the French BNP Paribas; Garanti Bank is owned by the Spanish BBVA; Denizbank is owned by Russian Sberbank; and Yapı Kredi Bank is co-owned by Italian Unicredit.
Still more foreign institutions replaced old, historic, brands entirely with their internationally recognized names such as ING Bank, HSBC, QNB and ICBC.
Some banks do remain under Turkish control: Işbank, for example, is owned by the Social Democratic Party/Republican People’s Party (CHP: the party founded by Kemal Ataturk); Vakif Bank is owned by the Government and both Ziraat Bank and Halk Bank are Turkish Government controlled.
Istanbul-based Türkiye İş Bankası is the largest bank in Turkey by Tier 1 capital, with US$10.4bn of core capital. It is closely followed by Akbank, which has US$9.6bn, and Türkiye Garanti Bankası, which has US$9.3bn.
Profits at Turkish banks have historically been high: hence their acquisitions by foreign banks. However, the country’s lenders are now bracing themselves for the impact of regulatory measures aimed at curbing consumer lending and fear profits may tumble.
All banks in Turkey offer a full range of ‘high-street’ banking services for the private and business customer. None offer investment banking.
All the high-street banks offer debit and credit cards.
International (offshore) banking
There is no offshore banking industry based in Turkey, but people living in Turkey often use the services of offshore banks based in other jurisdictions.
Turkish banking regulation
Following a series of bank failures and closures, all the banks operating in Turkey have, since 2000, been subject to the supervision of the Bank Regulation and Supervision Agency (BRSA, or BDDK in Turkish). It is very strict, and the system seems to work well. See www.bddk.org.tr.
Deposit protection in Turkey
Any money you have deposited with any of the high-street banks in Turkey will be protected if the bank goes bust. The maximum protection will be TRY100,000 (£22,000/€25,000/US$28,000) per customer in the bank. This means that whether Mr Smith has one account or several in the bank that has failed, the limit is TRY100,000. If, however, he had accounts in several banks, he would be covered to TRY100,000 for each bank.
Who can open a bank account in Turkey?
Anybody, Turkish or foreign (with some exceptions, including Iranian citizens who suffer many restrictions), resident or not, can open a bank account in Turkey. You will need:
- To produce proof of your identity and address, in order to satisfy international money laundering regulations. The proof of identity will be the original or a certified copy of your passport and the proof of address will usually be original ‘official’ bills from the likes of your utility company, the taxdepartment of the place where you live, etc.
- A Turkish taxnumber
- Your father’s & mother’s names and your mother’s maiden name
- For US citizens, there are further formalities to comply with US law
Internet banking in Turkey
All the high-street banks offer internet banking.
The instalment system
This is an arrangement for finance that is available and often used in Turkey.
A shop will promote the facility. You pay by credit card, with payment of the full price by instalments over six, nine, or 12 months. The shop receives immediate payment of the full amount, funded by the bank. You repay the bank by the agreed instalments.
How to choose the best bank in Turkey
This book cannot advise you about the strengths and weaknesses of the various banks in Turkey. However, if you are going to be living in Turkey, or if you have a holiday home there, there are four very practical considerations that will help you decide which bank and branch might best suit your needs. This assumes that you do not have a strong preference for one bank or another on other grounds.
- Choose a bankthat is located near to your home or in a place you visit regularly
- Choose a bankwhere there are (preferably several) members of staff who speak your language
- Choose a bankwhich provides internet banking services in your language
- If it comes to a tie-breaker, choose a bankwhere there is easy parking!
These considerations tend to be far more important than a marginal difference in interest rates or banking terms, especially as the best bank today is likely to be overtaken by another bank next week.
Turkish people tend to favour government-owned banks as they feel they are safer and more thorough. However, interest rates tend to be more competitive in the other banks.