Jewelers clear deck for battle against lenders

ISTANBUL

Many jewelers fear risks of harsh competition and shortage in revenues as banks also want to join the game. DAILY NEWS photo, Hasan ALTINIŞIK

With Turkish banks preparing to launch gold sales to customers, many jewelry companies are clearing the decks for the upcoming competition, saying that they might even sell gold at a loss, according to a sector representative. However, the sector itself is not that solid, as some large firms seem to be taking a third option.

Between 25,000 and 30,000 jewelry shops in Turkey are ready to wage war against banks if they start to sell gold coins at cash desks, according to Alaattin Kameroğlu, the chairman of the Istanbul Chamber of Jewelers, which represents 4,000 jewelers, in an interview with daily Dünya.

Jewelers can bear to assume the costs of Darphane – a banknote printing house that also mints regular gold coins – and already hold reserves under their desks, he told the paper. “Thus, if the banks sell the gold for 163 Turkish Liras, we will sell it for 160,” he said.

Banks collect gold

Banks have been collecting gold as the Central Bank raised the required reserve ratio for the lira liabilities that can be held in gold from 10 percent to 20 percent last year. For a while now, these banks, bulging with gold, have been urging the Central Bank to obtain permission to sell gold, raising severe objections from jewelers. “Banks can sell gold bars, which are a financial instrument, but the gold sold from the desk is a commodity and it’s not the banks’ business, as it is illegal,” Ekinci said.

The chairman also complained about banks making deals to collect under-the-table gold with Atasay, a big jewelry chain, and the Istanbul Gold Refinery, accusing them of bypassing jewelers.

In order to include the jewelers in the picture, the chamber suggests a system where each bank branch coordinates agreements with five local jewelers to collect under-the-table or scrap gold. The Central Bank, Union of Banks (TBB), Banking Regulation and Supervision Agency (BDDK) and about 40 representatives of the jewelry sector have held three meetings in three different cities so far but have not yet reached a solution.