More Arab banks on way to Turkey

ISTANBUL - Hürriyet Daily News

UAB head Fattauh (L), TMSF head Tevfik Bilgin (2nd L), Deputy PM Babacan (C), the Banks Association of Turkey head Aydın (2nd R) and UAB board member Chaibainou (R) pose during an Istanbul event.

Bank Audi, the Lebanon-based lender, which has become the first foreign lender to receive a Turkish license in 11 years, will be followed by other Arab banks eyeing entrance into the local market, according to the head of the Union of Arab Banks.

 “I assume there will be more banks looking for chances in Turkish market,” Secretary General of Union of Arab Banks (UAB) Wissam H. Fattouh said yesterday, while speaking to the Hürriyet Daily News on the sidelines of the Arab-Turkish Banking and Financial Forum in Istanbul.

“Some Arab banks have shown great interest in the Turkish banking sector,” said Fattouh, noting that lenders have been encouraged by the license granted to Bank Audi last year. The Turkish government also wants to license more Arab banks, according to him. “Turkey ranks as one of the best places to operate, especially after the crisis in the United States and Europe,” he added. 

Cooperating with Turkish banks, Arab lenders can also invest in third countries, particularly in Africa, according to Elhadi Chaibainou, an executive committee member of UAB, which represents Morrocan banks. Moroccan banks are ready for such partnerships with Turkish lenders, he told the audience at the event.

Turkey’s trade volume with Arab countries has peaked at $34 billion in five years, from $5 billion, said Hüseyin Aydın, chairman of The Banks Association of Turkey, noting that seven Arab banks were operating in Turkey today, with a total asset volume of $24 billion.

“I believe trade and banking bonds will strengthen through credits and bilateral investments,” he added. 

‘Peace key to welfare’

Turkish Deputy Prime Minister Ali Babacan said peace was the key to welfare and justice in the region, and called for stronger cooperation between the political leaders and bankers of the Arab states and Turkey.

Commenting on Bank Audi’s process of starting operations in Turkey, Fredie Baz, the group chief financial officer and strategy director said his bank had “done its homework.” The Lebanon bank has fully met all requirements of the regulations in Turkey to receive a license, Baz told the Daily News. “We have completed almost all our preparations, such as choosing a Turkish name and deciding on the general manager.” 

The bank will open its first branch on September as planned, he said. 

According to Baz, Turkey is one of the top competitive markets, and Audi will soon introduce new banking products to Turkish customers. “You will be soon able to open a bank account and receive debit and credit cards from ATMs,” he said.

Audi will bring in almost $6 billion to the local sector, Baz said, noting that some other Arab banks would also provide liquidity for Turkey’s financial institutions. 

“We have been always followed by other Arab banks when we penetrated into new markets, such as Saudi Arabia, Qatar and Egypt.” 

Increasing trade between Arab states and Turkey would pave the lenders’ way to Turkey, he said. “The sector is heavily regulated and I am impressed with that.”