Turkey’s banking regulator is “extremely sensitive” about maintaining staff levels and will not welcome layoffs if any banks are sold by their foreign owners, according to the Banking Regulation and Supervision Agency’s (BDDK) top official from.
“If some European banks are considering sales of their shares in Turkish banks during the peak time of economic volatility, we are sensitive about the possible buyers of the Turkish banks keeping on employees,” BDDK chair Tevfik Bilgin said yesterday during the ninth International Finance Summit in Istanbul.
“The banks can be on sale and purchased. We would not deal with pricing and so on,” he said, adding that the regulator would control whether the possible buyers would fulfill the banking requirements of the country.
“One of the greatest advantages of the Turkish banks on sale is that they have considerable value and attract many possible buyers,” said Bilgin. “It would not be welcomed if the buyers would plan layoffs on cost evaluation grounds.”
The top regulator also said the BDDK was “on alert” because of flows of funding seen from foreign-owned banks in Turkey to their parent companies abroad.
Debate on profits
“Turkish banks have faced low profitability despite high risk during the global crisis,” Turkish Banks’ Association (TBB) Chairman Hüseyin Aydın said during his speech at the meeting.
The Central Bank’s policy of alternating interest rates between the benchmark 5.75 percent and 12.5 percent has introduced a “considerable cost” for the country’s banks, Aydın added.
The banking regulator should take measures to address the growing costs, he said, adding that Turkey’s loan book may grow by approximately 14 and 20 percent next year.
“Turkey’s banking system still remains profitable,” Bilgin said following Aydın’s speech.
The total profits of Turkey’s banking sector reached a total of $16.4 billion Turkish Liras in the first nine months of this year, according to official data. Bilgin said profitability increased by 13 percent compared with the same period last year.
He estimated that Turkey’s banking sector would reach a total profit of between 19 billion and 20 billion liras by the end of the year.
ISTANBUL – Hürriyet Daily News