Banks expected to act against competition violation penalty

ISTANBUL - Hürriyet Daily News

People draw money from ATM machines of HSBC and Turkey’s İşbank, which are two of 12 alleged banks of violating anti-trust rules. The banks have right to file an annulment action. DAILY NEWS photo, Hasan ALTINIŞIK

Turkey’s state competition authority announced late yesterday the grounds of its decision to fine 12 banks, which were alleged to have violated anti-trust rules.

Now, the eyes are on the banks as they’re expected to present their objections against the institution.
The regulator fined 12 Turkish banks on March 8 after finding evidence of collusion in determining loan rates.

The Turkish banks Akbank, Denizbank, Finansbank, HSBC, ING, TEB, Garanti, Halk Bank, Isbank, Vakıfbank, Yapı Kredi and state-owned Ziraat Bank were charged to pay 1.12 billion Turkish Liras in total but they did not admit to any fraud allegations.

Halil Aydoğan, general manager of Vakıfbank which was fined 82.17 million liras within the case, said he found the penalty “excessive” and the bank would apply to law about it, daily Hürriyet reported.

“After paying the three quarters of the penalty, we have a right to appeal to court for the remaining part. We will use that right,” he said. He also noted that, thanks to the rise in rates, Vakıfbank had not revised its year-end plans, aiming at 1.75 billion liras of profits this year.

The banks have a right to file an annulment action at Ankara Administrative Court and some other banks are also expected to join Vakıfbank in moving to reduce their fines.

Akbank, Garanti Bank and Yapı Kredi were fined by 1.5 percent of their yearly total revenue. Garanti Bank will pay the highest fine at 213.4 million liras, followed by Akbank with 172.2 million liras and Yapı Kredi with 149.9 million liras.

Five other banks were imposed fines totaling 1 percent of their yearly total revenue, including Ziraat Bank, which was fined with 148.2 million liras and Isbank with a fine of 146.5 million liras. Denizbank, the Turkish branch of HSBC, and ING were fined with 0.6 percent of their yearly revenue, while TEB closed the list with a fine equivalent to 0.3 percent of its yearly revenue.

Chairman opposed

The 168-page reasoned decision statement, which includes investigation results, e-mail correspondences, evidences obtained from secret customers as well as dissenting votes and their justifications, revealed that Competition Board Chairman Nurettin Kaldırımcı voted against some parts of the decision too.

“I’m of the opinion that Turkey’s Işbank shouldn’t be among the banks grouped under this category considering its weight in the market and determinant power and also the other banks in the category didn’t violate competition regarding the characteristics of the market and the enterprises,” he was reported as saying in the statement. Kaldırımcı also didn’t agree with the majority of the board in the penalty amounts as he said the maximum penalty charged on state banks should be 0.5 percent of their revenue and 1 percent for others. He said he believed the banks charged with 0.3 and 0.6 percent fines shouldn’t be fined at all considering the market characteristics and position in the market.