Turkish participation bank diversifies funding sources, eyes more contribution to real economy

Published 21.11.2018 00:00
Updated 21.11.2018 00:58

One of Turkey's leading participation banks, Vakıf Katılım, which started operating in 2016, posted an asset size of TL 18.6 billion ($3.47 billion) in the third period. Capitalizing on its growth performance, recorded at 41 percent compared to the end of last year, the bank aims to provide more funds for the real economy sector, Vakıf Katılım's General Manager İkram Göktaş told Daily Sabah.

"In the period that we left behind, we offered more funds to the real sector than we raised by activating our equities in order to support our national economy. In the third quarter of 2018, the funds we provided were worth TL 19.1 billion, and the funds we raised amounted to TL 12.8 billion," Göktaş said. The bank's senior official drew attention to their successful performance in profits and noted that the bank achieved TL 223.2 million in profit in the third quarter of the year.

In the same period, the bank's equity was TL 1.4 billion, while its capital adequacy ratio stood at 16.13 percent, above the legal obligation level.

"Despite all the economic challenges, we continued to trust and invest in our country. In this respect, the number of our branches reached 87 as of Nov. 12 and spread to a large part of our country at a time when we regret seeing that banks are closing their branches. With the new branch investments to be made by the end of 2018, we aim to exceed 90 branches and reach approximately 1,200 employees," he added. Vakıf Katılım is the first Turkish bank that switched to the Person-to-Person Gold Transfer System.

In the third quarter of the year, the bank continued to provide funds for small and medium-size enterprises (SMEs) as part of the "Breath Loan Project," which enabled SMEs to easily meet their financial needs.

"We continued our activities to include more funds in the system both at home and abroad, diversify funding sources and bring the funds raised to more people. We also ensured new fund inflows by using the method of selling to qualified investors through lease certificate issuances. In the upcoming period, we will continue to carry out important works in the field of lease certificates," Göktaş explained. "All the activities we carry out are driven by the vision of Turkey having a more robust economy. We continue on our way in an effort to grow not only ourselves, but also our sector."

Evaluating the recent volatility in the Turkish markets, Göktaş pointed to the economic slowdown in the global markets and highlighted that the global setting creates an impact on the Turkish economy.

"We are going through a year in which economic shrinkage is taking hold of the entire world in waves and in which the economic conditions and dynamics of the world are changing rapidly," he said.

Göktaş also underscored that the economy administration has taken important steps to minimize the effects of this financial turmoil on our country's financial stability. Many structural changes are being made to address the current account deficit, boost the confidence of domestic and foreign investors, increase production capacity in strategic sectors, support high technology and develop new financial instruments. "The Turkish banking sector is in a very strong position with its assets and liabilities quality, capital structure and ratio, customer penetration and profitability. At this point, we can clearly say that there are no problems in the sector," he added.

In terms of future plans and goals, the general manager remarked that the bank will rely on its experienced management while continuously developing distribution channels, dynamic operation systems and an innovative approach to facilitate Turkey to reach its goals.

"In line with our growth strategy and our principle of being close to our customers, our branching efforts will continue in the upcoming period. Our aim for 2019 is to increase the number of our branches to 120," he said. For the near future, the bank prioritizes to increase the number of their individual customers, diversify their range of products and services, and introduce more people to the system. Göktaş said Vakıf Katılım continues to work on developing the function set of its existing products in digital channels and introducing innovations that will enable much easier use.

"Following our new technology services such as ChatBot, Beacon, Industry 4.0 in an attempt to personalize them for clients, the bank will also develop new prototypes," he said. In the upcoming period, Göktaş explained, "Vakıf Katılım will try to spread new technology it will develop with the environment set up for blockchain technologies, continuing its digitalization initiatives not only for Vakıf Katılım, but also for entrepreneurs, universities and institutions through cooperation."

"As it is known, energy expenditures are the biggest expense item of our country in terms of current account deficit. At this point, based on the Medium-Term Plan, we will continue to support mining, energy raw materials, domestic energy production equipment, renewable energy and nuclear energy investment projects that we currently offer support in order to reduce external dependency in energy," Göktaş emphasized. Vakıf Katılım is one of the participants and sponsors of the 17th Independent Industrialists and Businessmen's Association (MÜSİAD) EXPO which kicks off today and runs until Nov. 24. As part of the event, supported by state institutions such as the Customs and Trade Ministry and National Defense Ministry, the bank supports projects that will strengthen our national economy and enable new investments and cooperation.

Göktaş also stressed that the MÜSİAD EXPO, aimed at establishing global business networks, having a say in global markets, strengthening SMEs and accelerating effective growth, offers significant opportunities to create new business opportunities.

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