Financial Services Sector in Turkey
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1
Financial Services Sector in Turkey
October 2017
invest.gov.tr
Glossary of Terms
Acronym Definition Acronym Definition
ATM Automated Teller Machine Insurance Claims Follow-up and Monitoring
HAYMER
AUM Assets Under Management System
BIST Borsa Istanbul IMF International Monetary Fund
BKM Interbank Card Center
N/D No Data
BRSA Banking Regulation and Supervision Agency NPL Non-Performing Loan
CAGR Compound Annual Growth Rate O/N Overnight
CAR Capital Adequacy Ratio Organization for Economic Cooperation and
OECD
CBRT Central Bank of the Republic of Turkey Development
CEO Chief Executive Officer Q Quarter
CMB Capital Markets Board of Turkey ROA Return on Assets
ROE Return on Equity
CRD Capital Requirements Directive
Health Insurance Information and Monitoring
European Bank of Reconstruction and SAGMER
EBRD Center
Development
SME Small and Medium Enterprises
EGM Pension Monitoring Center
TBB Turkish Bank Association
EIU Economist Intelligence Unit
TL Turkish Lira
EU European Union
TSRB Insurance Association of Turkey
FCI Factors Chain International
FDI Foreign Direct Investment TCMA Turkish Capital Markets Association
FİDER Turkish Leasing Agency
GDP Gross Domestic Product
HATMER Life Insurance Information and Monitoring Center
2
invest.gov.tr
Table of Contents
Executive Summary 4 C. Capital Markets 40-55
A. An Overview of Turkish Financial Industry 5-8 i. Brokerage
B. Banking and Financial Intermediary 9-39 ii. Portfolio Management
i. Banking iii. Investment Trusts
ii. Financial Leasing iv. Funds
iii. Factoring v. Infrastructure Providers
iv. Financing D. Insurance 56-69
v. Asset Management i. Non-Life Insurance
vi. Payment Institutions and Electronic Money ii. Life Insurance and Pensions
Institutions
E. Turkey’s Competitive Landscape 70-83
3
invest.gov.tr
Executive Summary
The Turkish financial sector proved resilient during the global A key driver of the Turkish financial sector has been its robust
financial turmoil in 2009 as well as the ensuing economic crisis economy with a bright future. Over the past 14 years, Turkish
thanks to the regulatory reforms and structural overhaul that the economy has been growing with an average annual real GDP
government implemented in the wake of the country’s own growth rate of approximately 5.6 per cent and the growth
financial meltdown in the early 2000’s. In fact, the reforms in the momentum is expected to continue. Turkey’s sizeable and
sector boosted investor confidence so much that financial services diversified economy has achieved remarkable growth and
has become the preferred sector for FDI, attracting USD 49.6 billion became 13th largest economy in the world as of 2016.
during the past 15 years.
Turkey’s economic growth has resulted in income growth and
Banking dominates the Turkish financial sector, accounting for over a growing robust middle class with increasing purchasing
70 percent of overall financial services, while insurance services and power.
other financial activities also show significant growth potential.
As Turkish economy has expanded, it has integrated with the
There are 52 banks in Turkey (34 deposit banks, 13 development
global economy with a staggering increase in its volume of
and investment banks, 5 participation banks). Out 52 banks, 21
international transactions. Such developments have further
hold significant foreign capital (30% of total assets are held by
stimulated economic activity, thus expanded financial
foreign investors).
activities.
An expanding loan base and favorable liquidity conditions
contribute to the healthy growth of Turkey’s financial services. The Turkey has also set specific economic targets to achieve by
sector enjoys a leading position in the world with an ever-growing 2023, the centennial of the Republic. One of these targets is to
asset size and strong equity structure protecting it against shocks transform Istanbul into a prominent financial center. Turkey’s
that may arise from loans or turbulent market conditions. large and young population, qualified labor force and rapidly
developing markets along with its geo-strategic location
The Turkish insurance market is still underpenetrated (1.5% of
makes Istanbul an ideal candidate for an international financial
GDP) compared to peer countries and will provide significant
hub. Since, the government launched the project for Istanbul
potential as new insurers set up shop and acquire a share of the
Financial Center, Istanbul has rapidly made progress and is now
relatively untapped Turkish market. Turkey has seen strong
considered among emerging financial centers in the world.
economic growth fueled in part by a young and dynamic population
that is increasingly in need of financial products and services.
4
invest.gov.tr
A. Overview of the Financial Services Sector
Milestones of Turkey’s Financial Services Industry
1982-2000 2001-2006 2007-2012 2013-…
Capital Market Law Personal Pension Savings and Mortgage Law, Official Restructuring of Istanbul
Istanbul Stock Exchange Investment System Law Gazette No. 26454 Stock Exchange and
(ISE) Market opens Banking Act, Law No. 5411 Implementation of Basel II Establishment of Borsa
standards in Turkey Istanbul A.Ş.
Banking Regulation And Regulation on Measurement and
Supervision Agency (BRSA) Evaluation of Capital Adequacy Record profitability of the Implementation of Basel III
founded of Banks banking sector in Turkey standards in Turkey
Consolidation of the Market Law No. 6361 regarding State-owned banks opened
from 100 Banks to 49 Banks Financial Leasing, Factoring up participation banks
Takasbank is Authorized by and Financial Institutions New regulatory framework for
CMB as the National Establishment of Insurance Payment and Electronic
Numbering Agency of Turkey Information and Monitoring Money Institutions
Start of internet banking Center - TRAMER, SAGMER, Electronic Fund Trading
services HATMER, HAYMER Platform of Turkey (TEFAS)
All local or foreign insurance , began to operate
reinsurance and pension
companies operating in
Turkey are members of the
Insurance Association of
Turkey
New Capital Market Law No.
6362
invest.gov.tr Source: BRSA, CMB
Turkish financial sector, led by banking, has been rapidly growing while attracting tremendous amount
of foreign direct investment (FDI)…
CAGR Share
Asset Size of Turkey’s Financial Sector (TL Billion) 2008-2016 2016
Banking 4.211 Banking 18 66
Central Bank
Insurance and Private Pension CAGR
18% Central Bank 21 13
Other
Insurance & Pension 21 3
1.130
Other 14 18
Other includes: BIST capitalization, securities, consumer finance, real estate
investments, investment trusts, asset management and venture capital investment
2008 2009 2010 2011 2012 2013 2014 2015 2016 trust assets
FDI Flows into Turkish Financial Sector
(Cumulative Value in $ Billion, 2002-2016)
Others* 3.1
TOTAL:
$49.6
Billion
Banking:
38.7
6
Source: CBRT, BRSA, TCMA, IAT, CBRT, AFI, BIST
USD/TL as of 31.12.2016: 3.52
*Activities of Holding Companies and Other Activities Auxiliary to Financial Services
invest.gov.tr
Turkish financial sector has been a magnet attracting significant amount of FDI..
Greenfield FDI projects in Financial Services M&As by foreign companies in Financial Services
Value ($ Billion) Number Value ($ Billion) Number
2,6
69 67
77 23
63 19
2,2
2003-2009 2010-2016 2003-2009 2010-2016 2003-2009 2010-2016 2003-2009 2010-2016
“Turkey is one of the fastest growing insurance markets
“The Turkish banking industry is highly developed and worldwide, supported by a robust economic outlook and a
competitive, in our segment in particular. Returns are large, young population. The transaction with Yapı Kredi is a
important but for us the importance is mainly in its growth unique opportunity to move into a market-leading position
potential, the strategic location and export potential" in one of Europe’s key growth markets which is also an
important bridge between Europe and Middle East/Central
Asia. This transaction fits perfectly into Allianz’s strategy to
use bolt-on acquisitions to strengthen its position in growth
Sipko Schat markets.”
Executive board member responsible,
Commercial banking, Rabobank.
Oliver Bäte,
Rabobank obtained banking license from Turkish authorities in 2013 Member of the board of management of Allianz SE.
with an initial capital investment of $300 million.
Allianz acquired 94% of YapıKredi Sigorta’s shares for USD 880 million and 80% of YapıKredi
Bank’s pension business, YapıKredi Emeklilik, in March 2013.
Source: FDI Market, E&Y
invest.gov.trTurkey’s foreign trade in financial & insurance services has significantly increased in recent years..
Turkey’s Foreign Trade in Financial & Insurance Services
($ Billion)
6
Export Import
4.9
5
4
3 2.4
2
1
0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Turkey’s Foreign Trade in Insurance & Pension Services Turkey’s Foreign Trade in Financial Services
($ Billion) ($ Billion)
3 3
Export Import
2.6 Export Import
2,5 2,5 2.3
2 2
1.6
1,5 1,5
1 1 0.8
0,5 0,5
0 0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
invest.gov.tr Source: CBRTB. Banking and Financial Intermediary
i. Banking
ii. Financial Leasing
iii. Factoring
iv. Financing
v. Asset Management
vi. Payment Institutions
vii. Electronic Money Institutions
invest.gov.trFinancial Payment E-Money
Banking and Financial Intermediary
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
The banking sector’s asset size grew to more than TL 2.7 trillion in 2016.
Banking sector – comparison with Euro Area
Total Asset Size for the Banking Sector in Turkey
(2015)
120%
2500 296
Assets/GDP
105
2.731
2000
80%
166
1500 Loans/GDP
67
1000 40%
164 EA
500 Deposits/GDP
56 Turkey
407
0 0%
Housing 38
Loans/GDP 6
Total Assets (TL Billion) Total Assets/GDP (%, RHS)
• After the crisis in 2001, the Turkish banking sector was restructured Top 5 Turkish Banks by Asset Size 2016
and became one of the strongests in Europe. (TL Billion)
Ziraat Bank 357
• Turkey enjoys strong asset growth with a stunning CAGR 19%, with a İş Bank 312
remarkable increase in the total assets to GDP ratio from 63% in 2005
to 105% in 2016. Despite that, Turkish banking sector is still Garanti Bank 284
unsaturated when compared with the Euro Area.
Akbank 271
• State-owned bank Ziraat is the leader in terms of total assets with TL YapıKredi Bank 253
357 billion, followed by İş Bank with TL 312 billion.
0 100 200 300 400
Source: TBB, BRSA, Eurostat, ECB
• Non-consolidated balance sheet
invest.gov.tr USD/TL as of 31.12.2016: 3.52Financial Payment E-Money
Banking and Financial Intermediary
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
The total asset size of participation banks was more than TL 132 billion as of end 2016…
Asset Growth of Participation Banks Lending Growth of Participation Banks
140 4,9% 5% 100 6%
120 4,8%
4% 5%
80 4,2%
133
100 84
3% 4%
80 60
2% 3%
60 2,4%
40
1% 2%
40
20
20 10 0% 1%
6
0 -1% 0 0%
Participation Bank Asset Size (TL Billion)
Total Loans (TL Billion) Participation Banks' Loan/Total Loan (RHS)
Participation Banks' Asset/Total Assets (RHS)
• Islamic banking operations in Turkey started in mid 1980’s under the name of «Special Finance Houses». In 2005, these institutions were
renamed as «Participation Banks» and allowed to conduct banking activities in compliance with Islamic principles. Today there are five
participation banks operating in Turkey.
• The total asset size of participation banks was more than TL 132 billion by the end of 2016, growing at an impressive CAGR of 27% since
2005. The share of participation banks in banking sector assets increased from 2.4 % in 2005 to 4.9% in 2016.
Source: TKBB
invest.gov.tr USD/TL as of 31.12.2016: 3.52Financial Payment E-Money
Banking and Financial Intermediary
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
Through the years, Turkish banking sector has attracted many foreign investors..
Distribution of Banking Assets by Ownership • As of end 2016, 34% of the banking assets were owned by
public banks, 37% by private banks, 29% by foreign banks.
100% 4%
29% • The share of foreign banks in total assets increased from
80%
just 4% in 2004 to 29% in 2016 while the share of state
58% owned bank decreased to 34% from 38%.
60%
37%
• As of June 2017, there are 52 banks in Turkey. There are a
40% total of 34 savings banks, 13 development and investment
banks and 5 participation banks.
20% 38% 34%
• 5 of the deposit banks are state owned banks, namely,
0% Ziraat Bankası, Halk Bankası, Vakıflar Bankası, Adabank and
2004 2016 Birleşik Fon Bankası.
State Private Turkish Shareholders Foreign Shareholders
• Additionally, there are 4 state owned development and
Type of Banks, June 2017
investment banks: İlbank, Takasbank (Istanbul Settlement
and Custody Bank Inc.), Türk Eximbank and Development
Bank of Turkey.
Participation
5
Development
&
13
52
Investment
34
Deposit
invest.gov.tr Source: BRSAFinancial Payment E-Money
Banking and Financial Intermediary
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
While Turkish banking sector has been growing at full speed, it has also diversified its funding
sources..
Banking Sector Growth (TL Billion) Liabilities of Turkish Banks
2.731
6%
10%
15%
11% Other Liabilities
0%
6% 4%
Loans
6% Shareholder's Equity
Deposits 11%
1.734
Assets 15%
Securities Issued
1.453
Money Market
62% Banks
53%
Deposits
306
191
99
2004 Dec-2016 2004 Dec-2016
Source: BRSA
USD/TL as of 31.12.2016: 3.52
invest.gov.trFinancial Payment E-Money
Banking and Financial Intermediary
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
Loans have performed double-digit growth rates over the past decade..
Banking and Financial Intermediary
Development of Non-Cash and Cash Loans (TL Billion) Total SME Loans
2.000 400
350
1.600 300
CAGR
CAGR 250 22%
1.200 22%
200
150
800
100
50
400
0
0
Total Loans Extended to Medium Size Enterprises
Total Loans Extended to Micro Enterprises
Cash Loans Non-cash Loans Total Loans Extended to Small Enterprises
• Cash and non-cash loans increased at a rate of CAGR 22% from 2006 to 2016. Non-cash loans surpassed TL 550 billion as of end
2016, while cash loans were more than TL 1,700 billion.
• SMEs are the backbone of the Turkish economy. Turkish banks started funding SMEs at an increased rate from 2006. Total SME loan
amounts increased at a CAGR of 22% during this period with more than TL 420 billion in 2016.
Source: BRSA, Note: SME is defined by BRSA as an entity that employs less than 250 workers and has USD
40 million or less total net sales or balance sheet size
invest.gov.tr USD/TL as of 31.12.2016: 3.52Financial Payment E-Money
Banking and Financial Intermediary
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
New products offered by banks increased the amount of consumer loans...
Consumer Loan Breakdown by Type of Loan (TL Billion)
400
Vehicle Loans
350
Credit Card Risk
300 Consumer & other Loans
250 Mortgage Loans
CAGR
200 22%
150
100
50
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
• Total consumer loans increased substantially with a CAGR of 23% from 2005 to 2016 exceeding TL 418 billion.
• The increase in different loan product categories offered by banks supported the increase in consumer loans. Within this scope, the
introduction of mortgage loans, which constitute more than 39% of total consumer loans, reached to more than TL 160 billion with a
CAGR of 26% from 2005 to 2016.
Source: BRSA
USD/TL as of 31.12.2016: 3.52
invest.gov.trFinancial Payment E-Money
Banking and Financial Intermediary
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
Banks’ improved risk management keeps the NPL ratio around 3%, well-positioned vis-à-vis peer
economies..
Non-Performing Loans (NPL) Ratio NPL (%), 2016
6% 6,0%
5,3% 0 2 4 6 8 10
Romania 10,0
4% Russia 9,4
India 9,2
Hungary 7,4
3,2% Czech Rep. 4,8
2%
Poland 4,0
Brazil 3,8
Turkey 3,2
0% South Africa 2,9
Indonesia 2,9
Mexico 2,2
• Turkish banks have been barely affected by the global economic crisis of 2009, and were able to maintain low levels of NPL ratios.
The NPL ratio of Turkish banks was 3.2% as of end 2016. The main reason for this level was the comprehensive risk management
framework applied by the banks.
Source: BRSA, IMF
NPL Ratio: Non-Performing Loans/Total Loans
invest.gov.trFinancial Payment E-Money
Banking and Financial Intermediary
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
The solid capital structure of Turkish banks allowed the sector to enjoy high profits…
Fees, Commissions and Banking Services Income/Total Income
Banking Sector Profit ( TL Billion)
(Percentage)
16%
190
195
170 14%
15%
14%
150
14%
14%
13%
130
13%
110 12%
12%
12%
90
103
12%
12%
12%
70
85
10%
10%
50 38
30 20
44
10 8%
-10 -6,7
-30 -23
2009 2010 2011 2012 2013 2014 2015 2016 6%
Interest Income Interest Expense
4%
Non-Interest Income (Expense) Net Profit (RHS)
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
• The strong growth in the Turkish banking sector was also reflected in its profits exceeding TL 38 billion in 2016.
• The total interest income, which includes interest received from loans given, interest received from required reserves, interest received
from other banks and interest received from money market transactions increased over TL 195 billion.
• The banking sector not only benefits from increased income from interest but also from fees collected from other banking activities. The
share from fees, commissions and banking services is around 12%
Source: BRSA
USD/TL as of 31.12.2016: 3.52
invest.gov.trFinancial Payment E-Money
Banking and Financial Intermediary
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
The sector grew as a result of its strong asset quality and was able to maintain high profits…
ROA Country Comparison, 2016 ROE Country Comparison, 2016
Turkey 2,0% Turkey 17,5%
Czech Rep 1,4% Czech Rep 17,4%
Poland 0,8% Poland 9,0%
USA 0,4% UK 5,6%
UK 0,4% USA 3,2%
Russia 0,2% Russia 1,8%
• The Turkish banking sector’s return on asset (ROA) ratio was stronger than that of banks in major financial centers as well as Eastern
European countries. In 2016, ROA was 2.0% in Turkey.
• Moreover, return on equity was, again, well above that of the USA and Europe with 17.5% in 2016.
Source: IMF Financial Soundness Indicators
invest.gov.trFinancial Payment E-Money
Banking and Financial Intermediary
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
Turkey’s growing banking sector also resulted in the increase in the number of bank branches.
Total Number of Bank Branches in Turkey Including Foreign Branches
(2006-2016)
13.000 21 • The total number of branches increased at a CAGR of 5%
11.747
21 between 2006 and 2016.
12.000 20,9
20 • The highest number of branches belongs to commercial
11.000
20 banks, followed by participation banks and development
10.000 19 banks.
18,0 19 • The per branch employee number decreased as a result
9.000
18 of the increasing trend towards centralization of branch
8.000 7.204
18 operations as well as the increase in automated
7.000 17 functions, mobile and internet banking.
2015
2006
2007
2008
2009
2010
2011
2012
2013
2014
2016
# of Branch Employee per Branch (RHS)
Development of Cashpoints (ATMs) in Turkey
(2008-2016)
• The development of the banking sector over recent
60.000 years has affected the usage of cashpoints. As of end
48.421
50.000 2016, there were a total of 48,421 ATM cashpoints in
Turkey.
40.000
• Between 2008 and 2016, the number of ATMs grew at a
30.000
21.970 CAGR of 11%.
20.000
10.000
0
2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: BRSA, BKM
invest.gov.trFinancial Payment E-Money
Banking and Financial Intermediary
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
Banks also started focusing on alternative technologies that provide low cost and faster
transaction services.
Internet Banking Transaction Volumes Mobile Banking Transaction Volumes
( TL Billion) ( TL Million)
4.000 Cash Transfers 1.200
Cash Transfers
3.500 Investments
Payments 1.000 Investments
3.000 Credit Cards
Credit Cards
800 Payments
2.500 Other
Other
2.000 600
1.500
400
1.000
200
500
0 0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016
• The internet banking transaction value increased CAGR 22% between 2008 and 2016. Cash transfers had the lions’ share in total
internet banking transactions with 72% and increased impressively by a CAGR of 24% from 2008 to 2016. Notwithstanding the large
share from cash transfers, the fastest growth was observed in payments with a staggering growth performance of 32% CAGR.
• The mobile banking transaction values rose hundredfold since 2011 with CAGR of 145% and exceeded TL 1 trillion in 2016. It is
noteworthy to mention the development of mobile phone users and the number of 3G/4G LTE phone subscribers. In 2016, the
number of mobile banking users increased by 58% exceeding 19 million. 4G LTE service was launched by all operators in April 2016.
Source: TBB
USD/TL average for 2016: 3.02
invest.gov.trFinancial Payment E-Money
Banking and Financial Intermediary
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
Transactions for both credit and debit cards have increased significantly…
• Turkey’s vibrant and growing economy had a positive impact Development of Credit Cards and Transaction Volume
(2008-2016)
on the development of credit and debit cards, providing
significant potential for banks. 700 70
600 60
500 50
400 40
• The number of credit cards in Turkey increased at a CAGR of
300 30
4% between 2008 and 2016. And, a staggering CAGR of 16%
was realized during this time in transaction volume reaching 200 20
TL 601 billion in 2016. 100 10
0 0
2009 2010 2011 2012 2013 2014 2015 2016
Transaction Volume (TL Billion)
• The rapid development was also observed for debit cards. In Total Number of Credit Cards (Million, RHS)
2016, transaction volume reached TL 580 billion and the
CAGR since 2008 was 18%.
Development of Debit Cards and Transaction Volume
(2008-2016)
700 140
600 120
500 100
400 80
300 60
200 40
100 20
0 0
2008 2009 2010 2011 2012 2013 2014 2015 2016
Transaction Volume ( TL Billion)
Total Number of Debit Cards (Million, RHS)
Source: BKM
invest.gov.tr USD/TL average for 2016: 3.02Financial Payment E-Money
Banking and Financial Intermediary
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
A Success Story: ICBC
Banking and Financial Intermediary
• ICBC Turkey Bank A.Ş. (formerly known as Tekstil Bankası
A.Ş.) was incorporated as a privately owned bank in 1986 and
"ICBC’s decision to enter the Turkish market in 2015 was aiming shares of the Bank have started publicly trading in the Borsa
to develop financial service network between China and Istanbul (BIST) as of 1990.
Turkey in order to tie economic relations between the • GSD Holding A.Ş. acquired 75.5% of the Tekstil Bankası
countries due to its globalization strategy. Turkey, being the A.Ş.’s shares and became the majority shareholder in 2007;
financial center between the West and East, offering and the remaining shares at 24.5% continued to publicly
advantages of growing economy and geographical location, trade in the BIST.
enabled ICBC’s institutions to boom project-oriented financial
services and strengthen the synergy between its already • Industrial Commercial Bank of China Limited (ICBC) and GSD
established commercial and financial partners.." holding came to an agreement in 2014 for the sale of 75.5%
of the shares of the Bank.
XU KEEN, Chairman of the Board of Directors ICBC Turkey,
• Shares were successfully transferred to ICBC on May 22nd,
2015.
• The corporate name of the Bank has been changed from
“Tekstil Bankası A.Ş.” to “ICBC Turkey Bank A.Ş.”
• In 2016, ICBC Turkey’s total assets increased by 23% and
reached to TL 8.2 billion. Similary, deposits and loans of the
Bank increased by 30% and 23% in the same year.
Source: ICBC Turkey
invest.gov.trFinancial Payment E-Money
Banking and Financial Intermediary
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
Financial Services Sector:
Banking and Financial Intermediary
Selected Players
Iş Bank Garanti Bank Akbank Ziraat Bank
• Iş Bank was established in 1924 • Founded in 1946, Garanti is • Established in 1948 in Adana • Homeland Funds, the origin
and is Turkey’s largest private Turkey’s second largest for cotton growers, Akbank of Ziraat Bank, was founded
bank. private bank with total is owned by Sabancı Holding in 1863 to support farmers
assets worth TL 284 billion and other shareholders and agricultural
• The bank’s shares are held by
by the end of 2016. development.
the Işbank Pension Fund, the • Akbank provides consumer,
Republican People’s Party and • Garanti is controlled by the commercial, SME, corporate • The Republic of Turkey
32% of the shares were open to Spanish bank BBVA, with and private banking services Prime Ministry Under
public. Doğuş Holding having the as well as foreign exchange, secretariat of the Treasury
minority shares. foreign trade financing and is the sole owner of Ziraat
• Iş Bank’s total assets were TL
treasury transactions. Bank.
312 billion by the end of 2016. • Garanti provides integrated
financial services in every • The bank’s total assets • Ziraat Bank is the largest
• Iş Bank’s products and services
segment of banking and has reached approximately TL bank in Turkey and has the
include retail, corporate
subsidiaries for pension, life 271 billion by the end of most extensive network.
banking and capital market
insurance, factoring, 2016.
operations and other financial • Ziraat Bank’s total assets
leasing, brokerage and
services such as private reached TL 357 billion by
asset management on both
pensions, insurance, asset the end of 2016.
national and international
management, leasing and
levels.
factoring.
Source: Company websites
invest.gov.trFinancial Payment E-Money
Banking and Financial Intermediary
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
Participation Banks:
Banking and Financial Intermediary
Selected Players
Ziraat Katılım Albaraka Kuveyt Türk
• Ziraat Katılım is Turkey’s first state- • Established in 1984 by Albaraka Banking • Kuveyt Türk started its activities in 1989.
owned participation bank established Group, Islamic Development Bank and
• It is owned by Kuwait Finance House, the
in 2015 other investors; it is a pioneer in
Public Institution for Social Security of
participation banking in Turkey.
• It operates in credit intermediation Kuwait, the Turkish Directorate General
and related activities. • Albaraka had TL 32.8 billion of total assets of Foundations and the Islamic
as of end 2016. Development Bank.
• Türkiye Finans had assets worth TL 7.9
by the end of 2016. • Albaraka Türk offers its customers • Kuveyt Türk’s total assets were TL 48.4
participation accounts, personal and billion in 2016.
• The bank has retail, commercial and
corporate finance, leasing and project-
SME banking services for both national • The bank’s main products are current and
based profit and loss sharing services.
and international customers. participation accounts, investment and
saving accounts and leasing.
Source: Company websites
invest.gov.trFinancial Payment E-Money
Banking and Financial Intermediary
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
invest.gov.trFinancial Payment E-Money
Banking and Financial Intermediary
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
Financial leasing assets grew at a CAGR of 14% between 2007 and 2016.
Financial Leasing Transaction Volume
Financial Leasing Asset Size Growth in Turkey
(2016)
48 100 40%
44 2,0%
Transaction Volume
40 Leasing Asset Size (TL Billion) 80 Penetration (RHS) 30%
36 1,6%
Leasing Volume/GDP (RHS)
32 60
28 20%
1,2%
24 40
20
0,8% 10%
16 20
12
8 0,4% 0 0%
4
0 0,0%
• Turkey’s leasing transaction volume reached USD 7.7 billion in 2015, which means approximately 10% CAGR since 2011.
Despite the huge growth in Turkey’s leasing sector, it is still underpenetrated but significant upside potential as leasing asset
size grows.
• The total asset size grew at an impressive CAGR of 14% from 2007 to 2016 to more than TL 44 billion.
• Furthermore, participation banks in Turkey can also conduct financial leasing operations on tangible items.
Source: FKB, White Clarke Global Leasing Report
USD/TL as of 31.12.2016: 3.52
invest.gov.trFinancial Payment E-Money
Banking and Financial Intermediary
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
Real estate had the highest share in financial leasing with 28% in 2015.
Financial Leasing Investment by Product Type
Financial Leasing Receivables in Turkey
(2015)
60 14% Real Estate
12% 16% Construction Equipment
50
51 4% 24%
10% Machinery and Equipment
40
8% Metal Processing
30 7%
6% Textile Equipment
20 Medical Equipment
4% 7%
10 Other
2% 25%
0 0% 17%
2008 2009 2010 2011 2012 2013 2014 2015 2016
Leasing Receivables ( TL Billion) NPL (RHS)
• The Turkish government promotes financial leasing operations. As of December 2011, it reduced the VAT applied for leasing
operations to 1% for leasers that have investment incentive documents. The items that can be leased include steam boilers,
steam turbines, concrete pumps and centrifuges among other items. In light of this support, financial leasing receivables
steadily increased.
• Financial leasing receivables increased at CAGR of 17.6% between 2008 and 2016 exceeding TL 51 billion in 2016.
• Leasing of construction equipment had the highest share in terms of investment amount with 25%, followed by real estate
with 24%.
Source: BRSA, FKB
invest.gov.tr USD/TL as of 31.12.2016: 3.52Financial Payment E-Money
Banking and Financial Intermediary
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
Leasing Sector Operational Figures
Banking and Financial Intermediary
Leasing Sector Operational Figures
2010 2011 2012 2013 2014 2015 2016
Number of Companies 16 17 18 32 29 28 26
Number of Branches 69 72 75 117 138 143 141
Number of Personnel 1,286 1,217 1,258 1,361 1,458 1,504 1,519
Number of Clients 50,428 43,294 45,089 46,752 52,041 56,396 58,373
Number of Contracts 10,186 14,648 17,787 19,790 20,302 23,124 23,751
• The leasing sector in Turkey makes up a significant part of the non-banking sector with 23,751 contracts in 2016.
• In 2016, the number of skilled personnel in the leasing sector was 1,519 and the total number of clients was 58,373.
• With 26 institutions all across Turkey, leasing companies provide necessary services to their clients.
Source: FKB
invest.gov.trFinancial Payment E-Money
Banking and Financial Intermediary
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
The leasing sector is a promising one with 14% growth in revenues in 2016 compared to 2015.
Banking and Financial Intermediary
Leasing Revenues and Net Profits/Loss
(TL Million)
3.500
3.127
Leasing Revenues
3.000
Net Profit/Loss
• Revenues in the leasing sector in Turkey have been
2.500 increasing since 2009.
2.000
1.538 • As of 2016, leasing revenues were TL 3,127 million, which
1.500 corresponds to a 14% increase compared to the previous
year and 9% CAGR since 2008.
922
1.000
• Net profit increased from TL 809 million to TL 922 million in
590 2016.
500
0
2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: BRSA
USD/TL average for 2016: 3.02
invest.gov.trFinancial Payment E-Money
Banking and Financial Intermediary
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
Leasing Sector:
Selected Players
BNP PARIBAS SIEMENS AG GARANTI YATIRIM
Leasing Solutions Leasing Leasing Leasing
• BNP Paribas Leasing • Siemens Finansal Kiralama • Garanti Leasing was founded • Yatırım Leasing was
Solutions, a global leader in A.Ş. was established in 1997 in 1990. founded in 1993. It joined
financial services, signed a by Siemens AG Leasing, TETAŞ Group in 2004. The
• It uses Garanti Bank branches
cooperation agreement with which has offices in more company offers its clients
as a distribution channel. In
TEB Leasing in 2005. than 20 countries. investment services in
2007, Garanti Leasing
different sizes and terms
• In 2009, BNP acquired Fortis • Siemens leases printing founded Garanti Fleet.
and consultancy to promote
Leasing. machines, textile, tourism
• Garanti Leasing aims to leasing activities in Turkey.
and office equipment,
• TEB Leasing and Fortis become the first Turkish
transport vehicles, • Yatırım Leasing provides
Leasing then merged under leasing company to open
computers and software, financing for capital such as
the umbrella of BNP Paribas offices overseas.
cranes and construction medical and construction
Finansal Kiralama A.Ş. in 2011.
machinery, power stations • Business premises, real equipment, press and
• BNP leases medical and data and communication and estate, medical and office packaging, appliances for
processing equipment, security systems. equipment, construction, metals and textile sectors.
energy facilities, transport textile and manufacturing
• The company’s total assets
vehicles, construction machinery can be leased from
were TL 96.4 million in 2016.
machinery and real estate. Its Garanti Leasing.
total assets in 2016 was TL
• Garanti Leasing’s total assets
3.1 million.
in 2016 amounted to TL 5.5
million.
Source: Company Websites
invest.gov.trFinancial Payment E-Money
Banking and Financial Intermediary
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
The assets in the factoring sector in Turkey have been increasing significantly, reaching TL 33.1
Banking and Financial Intermediary
billion in 2016.
Total Assets of the Factoring Sector (TL Billion) Factoring Sector Selected Financial Indicators
35 33,1 TL Billion 2011 2012 2013 2014 2015 2016
30
Receivables 14.2 16.3 20.1 24.7 24.9 31.1
25 CAGR
20%
NPLs (%) 4% 5% 4.9% 4.5% 5.5% 4.8%
20
15 Reserves 0.4 0.7 0.8 0.9 1.2 1.3
10 7,8 Banks 0.5 0.7 0.6 0.4 0.3 0.5
5
Credit 11.5 12.8 15.5 18.4 18.0 23.5
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 SE Equity 3.4 3.9 4.0 4.4 4.6 5.1
• In Turkey, factoring was introduced in 1988 to support manufacturers’ export activities. One of the major advantages of factoring is its
ability to provide companies with immediate cash flow for their accounts receivable.
• Turkish factoring sector has been growing with a CAGR of 20% betwwen 2008 and 2016, reaching TL 33.1 billion by the end of 2016.
• Receivables in the sector grow with a CAGR of 17% since 2011.
Source: BRSA, FKB
USD/TL as of 31.12.2016: 3.52
invest.gov.trFinancial Payment E-Money
Banking and Financial Intermediary
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
Factoring revenues increased by 17% in 2016 demonstrating a vast potential in the sector.
Factoring Revenues and Net Profit • The revenue and net profit of the factoring sector have
(TL Billion) been increasing since 2009.
5 4,3 0,7 • Compared to 2009, factoring revenues increased 220%
4,5 reaching TL 4.3 billion in 2016.
0,6
4 • The net profits in factoring reached TL 665 million in 2016.
3,5 0,5
3 0,4
2,5
2 0,3
1,8
1,5 0,2
1
0,1
0,5
0 0,0
Factoring Revenues Net Profit (RHS)
Source: BRSA
invest.gov.tr USD/TL average for 2016: 3.02Financial Payment E-Money
Banking and Financial Intermediary
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
The total numbers of clients and contracts have been increasing in the factoring sector
Banking and Financial Intermediary
demonstrating its high service potential.
Factoring Sector Operational Figures
2011 2012 2013 2014 2015 2016
Number of
75 78 76 76 66 62
Companies
Number of Agencies &
243 247 319 366 379 360
Branches
Number of Personnel 3,819 4,186 4,650 4,980 4,804 4.716
Number of Clients 91,029 84,769 87,624 93,327 95,416 98,908
• The table above provides some of the most crucial operational figures of the factoring sector. The sector continued its growth
between 2011 and 2016 in almost every operational activity.
• For example, the number of branches and agencies in the factoring sector increased from 243 in 2011 to 360 in 2016. This also
resulted in the increase of highly skilled personnel in this field reaching a total of 4,716, which is a 23% increase compared to 2011.
Source: BRSA
invest.gov.trFinancial Payment E-Money
Banking and Financial Intermediary
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
Factoring Sector:
Selected Players
Garanti Factoring YapıKredi Factoring TEB Factoring
• Garanti Factoring was established in • YapıKredi Factoring was established in • TEB Factoring was established in Turkey
1990 in order to provide factoring 1999. in 1997.
services to industrial and commercial
• The company provides services to • The company provides factoring services
companies.
commercial companies and more than domestically and internationally.
• Garanti Factoring open edits shares 90% of its customer base is small and
• Since 1998, TEB Factoring is a member of
to the public in 1993 and is traded on medium size enterprises.
the Factors Chain International.
Borsa Istanbul.
• YapıKredi Factoring is an active member
• The total assets of TEB Factoring in 2016
• The company currently has 20 of both the Factoring Association and
amounted to TL 1.7 billion.
branches in 14 cities of Turkey. Factors Chain International (FCI).
• The total assets of the company were • In 2016, the total assets of YapıKredi
TL 2.9 billion in 2016. Factoring were TL 3.1 billion.
Source: Company Websites
invest.gov.trFinancial Payment E-Money
Banking and Financial Intermediary
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
Turkish consumer financing sector has been constantly growing since 2009.
Consumer Financing Sector Assets
(2009-2016) • One of the main advantages of consumer financing
35 32,8 50% companies is their ability to provide fast and efficient loans
for their customers. Most consumer financing companies in
30 40% Turkey are focused on specific financing fields such as car
25
30% loans or mortgages, which allow them to serve their
20 customers faster and with a variety of choices targeted to
20%
15 them.
10%
10
• Also, it is important to note that with the amendment of Law
5 0%
No. 6361 regarding "Leasing, Factoring and Financing
0 -10% Company Law," new benefits were introduced in the
2009 2010 2011 2012 2013 2014 2015 2016 consumer financing sector in 2012.
Total Assets (TL Billion) % Growth (RHS) • According to the law, financing companies now have the title
of credit institutions and are now allowed to provide cash
loan up to 5% of their total assets.
Consumer Financing Sector Selected Financial Indicators
2011-2016 (TL Billion) • As of 2016, total assets for the consumer financing sector
was TL 32.8 billion increasing by 21% compared to the
2011 2012 2013 2014 2015 2016 previous year.
Receivables 8.4 10.7 14.5 18.1 23.8 27.8 • Non-performing loans (NPLs) ratio in the sector has been
relatively low, revolving around 3%.
NPLs (%) 2.9% 2.8% 2.7% 2.7% 3.0% 3.3%
Reserves 0.1 0.1 0.2 0.2 0.3 0.4
Banks 0.2 0.5 0.9 0.7 0.8 1.6
Credit 7.1 9.0 12.6 16.4 22.0 27.9
SE Equity 0.6 0.9 1.2 1.4 1.7 2.7
Source: BRSA, CBRT
USD/TL as of 31.12.2016: 3.52
invest.gov.trFinancial Payment E-Money
Banking and Financial Intermediary
Major Players
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
Name Web Page What They Do
ALJ Finance was founded in 2011 by Saudi Arabian ALJ car distributors. The company’s total assets
https://www.aljfinans.com.tr/
reached TL 1 billion in 2016.
DD Founded in 2006 by Doğan Holding and Deutsche Bank as the first mortgage company of Turkey.
http://www.ddm.com.tr
Mortgage
Established in 1999 by Volkswagen and Doğuş Finans, VDF offers 5 types of credit covering 7 brands for its
http://www.vdf.com.tr/ customers across Turkey.
Şeker Finans started its operations in 2008 under the name Istanbul Finans and then merged with
https://sekerfinans.com.tr/
Şekerbank in 2010. It offers mortgage and renovation work loans.
In 2015, it provided USD 21.7 billion loans, USD 13.7 billion insurance. Its total financial support accounted
http://www.eximbank.gov.tr for 20.4% of Turkey’s exports. As of 2015, it has total assets worth of TL 44.4 billion.
Koçfinans offers its customers car, mortgage and education loans. Since its founding in 1995, the company
http://www.kocfinans.com.tr/ has provided credit for more than 3.8 million customers, approximately USD 11 billion worth of loans.
Koç Fiat Kredi was founded in 2000 by Koç Holding and Fiat and was later bought by Tofaş Türk Otomobil
https://www.kocfiatkredi.com.tr Fabrikaları A.Ş. It is a captive finance company serving 4 brands. In 2016, the company made loans worth of
TL 2.3 billion.
http://www.man-financial- Since it started its operations in 2005, MAN offers consumer credits for MAN vehicles and trucks.
services.com.tr/
Orfin has been operating since 2011 and has a financial portfolio of products worth EUR 22.5 billion
http://www.orfin.com.tr/ worldwide. In Turkey, the company has TL 192 million shareholders equity and offers its services for the
sales of the Renault and Dacia brands.
TEB Cetelem was the product of the partnership between TEB Financial Investments A.Ş and BNP Paribas
http://www.tebcetelem.com.tr/ Personal Finance, which has been active in Turkey since 1995.
Since 1863 the cooperative has given general purpose loans for agricultural producers including loans for
http://tarimkredi.org.tr/ pesticides, fertilizers, animal husbandry, oil, and irrigation up to TL 50,000, which is to be repaid in 1 - 4
years with interest rates varying between 8 or 10%.
Source: Company Websites
invest.gov.trFinancial Payment E-Money
Banking and Financial Intermediary
NPL management to create value
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
for the financial system
• Asset Management Companies are licensed and regulated by the BRSA
➢ to collect NPL portfolios with different loan types and security structures
➢ loans
➢ credit card receivables
➢ and other assets of
➢ different financial institutions including banks, leasing companies and others.
➢ by using their own capital or issuing bonds
➢ to liquidate or resell by restructuring
Functions of Asset Management Companies
clean-up of banks’ balance sheets
provide liquidity to financial system
Restore financial customers to good financial health
• There are 12 Asset Management companies in Turkey
invest.gov.trFinancial Payment E-Money
Banking and Financial Intermediary
Alternative payment systems
Banking Factoring Financing Asset Man.
Leasing Inst. Inst.
have been emerging in Turkey
➢ Payment Institutions are licensed and regulated by the BRSA
➢ Maturing financial markets, developing fintech ecosystem and growing e-commerce market made it
attractive for banks and non-bank institutions to operate in alternative payment systems
➢ There are 27 payments institutions operating in Turkey
➢ Services provided by Payment Institutions:
➢ Virtual POS
➢ Fraud Protection
➢ Mobile Payments
➢ Marketplace solutions
➢ Invoice Payments
➢ On top of the services provided by Payment Isntitutions, Electronic Money Isntitutions are allowed to
issue Electronic Money which is a digital equivalent of cash.
➢ There are 8 Electronic Money Institutions operating in Turkey.
E-commerce Transactions
(2012-2016)
300 80
250
60
200
150 40
100
20
50
0 0
2012 2013 2014 2015 2016
Number of Transactions (million)
Volume of Transactions (billion TL) (RHS)
39Source: BKM
invest.gov.trC. Capital Markets
i. Borsa Istanbul
ii. Brokerage
iii. Portfolio Management
iv. Investment Trusts
v. Funds (Investment and Pension)
invest.gov.trCapital Markets
A brief timeline of developments in Turkish Capital Markets
ISE demutuailized Electronic Fund
Capital Markets Law Liberalization of New IFRS regulation New Capital Markets and transformed to Distribution
passed Foreign Investment was adopted Law passed Borsa Istanbul Platform of Turkey
CMB was established Fully automated Public Disclosure Borsa Istanbul (TEFAS) began to
trading started Platform was merged with Istanbul operate
Istanbul Stock
Exchange was Corportate introduced Gold Exchange and
established Governance First Islamic Bond Derivatives
Principles were was issued Exchange
published
First ETF was
established
Capital Markets Board
Equity
Debt Market
Banks Market Takasbank
Public Companies
Central
T Brokerage Firms B Registration
Listed Companies Agency
C I
M Portfolio Funds (TEFAS)
S Licensing and
A Management
Companies
T Training Agency
Public Offering
Rating
of Equities Companies and
Investment Trusts Independent
of Corporate Debt Audit Companies
Institutions Products Infrastructure Providers
invest.gov.trCapital Markets
Regulatory Framework of the Turkish Capital Markets
•CML is in accordance with EU regulations
Capital Markets
•The goal is to have a robust and well functioning
capital markets while strengthening the
investor protection
Law (CML) •CML defines capital market activities and types
of institutions allowed to operate in capital
markets
• CMB is the regulatory and supervisory authority in
the Turkish Capital Markets
Capital Markets
• CMB aims to ensure the safe, fair, effective and
orderly functioning of the capital markets while
protecting investor rights
Board (CMB) • CMB regulates and supervises
•«Capital Users» and «Capital Providers»
•Intermediaries and Instruments
•Market Infrastructure Providers
Intermediaries •Brokerage Firms
and •Portfolio Management Companies
•Investment Trusts
•Funds
Instruments
Market Infrastructure Providers
invest.gov.trPortfolio
Portfolio Infrastructure
Infrastructure
Capital Markets
Brokerage
Brokerage Investment
Investment Trusts
Trusts Funds
Funds
Management
Management Providers
Providers
In Turkey, only brokerage firms are allowed to trade equities.
Total Assets of Brokerage Firms
( USD Billion)
7 6,4 6,5 6,5
6,0
6
5,3
5
4,2
4
3
Brokerage Firms Fact Sheet
2
• As of 2016, there are 66 brokerage firms performing in the equity
market 1
• 76% of the total share of the trading volume in the equity market was 0
2011 2012 2013 2014 2015 2016
generated by domestic individuals, corporations and institutional
investors. Foreign investors contributed 24% of total trading volume.
• In the derivatives exchange market, 66 brokerage firms were operating
as of 2016. The total trading volume of intermediaries was TL 1.1 Breakdown of Revenue for Brokerage Firms
trillion in 2016. 72% of the trades were made by domestic investors ( 2016)
and 28% by foreign investors. Brokerage
7% Commissions
5%
Revenues from
19% Services
Proprietary Trading
70%
Profit/Loss
Other Revenues
43
Source: TCMA
invest.gov.trPortfolio Infrastructure
Capital Markets
Brokerage Investment Trusts Funds
Management Providers
Capital Markets
Turkey’s Portfolio Management industry has a higher potential than that of its peers…
Types of Portfolio Management Companies
Porfolio Real Estate Portfolio Venture Capital Portfolio
Management Companies Management Companies Management Companies
•Establish and manage •Establish and manage •Establish and manage
•Securities Mutual Funds •Real Estate Investment Funds •Venture Capital Investment Funds
•Foreign Mutual Funds
•Pension Mutual Funds
•Guaranteed Funds
•Protected Funds
•Investment Funds
•Real Estate Investment Funds
•Venture Capital Investment Funds
50 Portfolio management companies Total Portfolio size is 34.6 billion USD (TL 122 billion)
19% CAGR of portfolio size since the global financial crisis 211 portfolio managers
TL 333 million of Portfolio Management Commissions TL 3.5 million Investment Consultancy Revenues
Source : CMB, TCMA
invest.gov.trPortfolio Infrastructure
Capital Markets
Brokerage Investment Trusts Funds
Management Providers
Capital Markets
Turkey’s Portfolio Management industry has a higher potential than that of its peers…
Portfolio Size / GDP
140 4.7% 5,0%
Billions TRY
4,5% Bulgaria
120
4,0% Turkey 4,7%
122
100 3,5% Romania
Croatia
3,0%
80
Portugal
2,5%
Poland 13,8%
60
2,0%
Italy
24,1%
40 1,5% Belgium
1,0% Finland
20 49,7%
0,5% Germany
61,9%
6
Sweden
0 0,0% 80,2%
Malta
Netherlands 115%
Portfolio Size Portfolio Size/GDP (RHS)
0% 20% 40% 60% 80% 100% 120%
• Total portfolio size of portfolio management companies has been increasing with a CAGR of 24% since 2002 and reached 122 billion TL
(35 billion USD) at the end of 2016.
• On the other hand, total portfolio size/GDP ratio is on upward trend and increased to 4.7%.
• Besides, the ratio still lags behind that of other developed and developing European countries, which means a higher potential for
future growth.
Source: CMB, TCMA, EFAMA
invest.gov.trPortfolio Infrastructure
Capital Markets
Brokerage Investment Trusts Funds
Management Providers
Capital Markets
Net asset value of Investment Trusts more than doubled in the last 6 years…
Investment Trusts
• Investment Trusts are close-ended joint-stock
Investment
Securities companies with a fixed number of shares which
Investment Trusts manage portfolio of capital market instruments and
Trusts
real estates.
Real Estate • There are 3 types of Investment Trusts
• Securities Investment Trusts (SIT): Securities
Investment Trusts Investment Trusts are required to invest at
least 25% of their assets in equities that are
Venture Capital issued by Turkish companies.
Investment Trusts • Real Estate Investment Trusts (REIT): Real
Estate Investment Trusts manage a portfolio
composed of real estates, real estate projects,
real estate-based rights, infrastructural
investments and services, and other capital
Net Asset Value of Investment Trusts market and Money market instruments.
30
• Venture Capital Investment Trusts (VCIT):
26.4 Venture Capital Investment Trusts can
Billions TRY
25 23.7 22.9 purchase stocks and borrowing instruments
20.0 issued by the entrepreneur companies, issue
20 17.2
borrowing instruments, participate in the
15 12.9 active management of the entrepreneur
10 company, and invest in other venture capital
investment trusts.
5 • Investment trusts may employ portfolio managers to
0 manage their own portfolios. They can also get
2011 2012 2013 2014 2015 2016 portfolio management or investment advisory service
from Portfolio Management Companies.
SIT REIT VCIT
• Investors trade shares of investment trusts in the
stock Exchange. They are paid dividends at the end of
the years.
Source: CMB
invest.gov.trPortfolio Infrastructure
Capital Markets
Brokerage Investment Trusts Funds
Management Providers
Capital Markets
43 companies are managing mutual funds as of December 2016…
Securities
Mutual Funds
• Mutual funds are established in the form of open-end
Foreign investment companies in Turkey.
• They do not have any legal entity.
Mutual Funds Guaranteed • There are two different types of mutual funds in Turkey, Type
A and Type B.
Real Estate • Type A mutual funds are required to invest at least 25%
Funds
Protected of their assets in equities that are issued by Turkish
Investment Funds
companies.
Venture Capital • Mutual funds that have no such obligations are
Investment
Investment Funds
classified as Type B mutual funds.
• Kinds of mutual funds are classified according to their asset
Pension Funds
allocation such as
• Securities
• Foreign
Net Asset Value of Mutual Funds • Guaranteed
50.000 • Protected
million TL
43.755 • Investment
45.000
40.000 • There are 384 mutual funds as of December 2016 with a net
asset value of TL 43.8 billion.
35.000
30.000
25.000
20.000
15.000
10.000
9.347
5.000
0
47
Source: CMB
invest.gov.trPortfolio Infrastructure
Capital Markets
Brokerage Investment Trusts Funds
Management Providers
Capital Markets
A new investment fund instrument for Turkey: Real Estate Investment Funds…
Securities
Real Estate Investment Funds (REIFs):
• established and managed by Portfolio Management Companies
Foreign or Real Estate Portfolio Management Companies.
• can be sold to Qualified Investors
Mutual Funds Guaranteed • REIFs are allowed to engage only in management of portfolios
comprised of the following assets and transactions:
Real Estate • Real estates and property rights,
Funds
Protected • Private and public debt instruments, and shares of joint-
Investment Funds
stock companies established in Turkey
Venture Capital • Foreign private and public debt instruments and joint-
Investment
Investment Funds stock company shares
• Time deposit and participation account;
Pension Funds • Investment fund units;
• Repo and reverse repo transactions;
• Warrants and certificates;
• Lease certificates and real estate certificates;
Net Asset Value, 2016 • Settlement and Custody Bank Money transactions;
• Cash collaterals and premiums of derivative transactions;
• Specially designed foreign investment instruments and
loan participation notes deemed appropriate by the
Board,
• Other investment instruments deemed appropriate by
TL the Board.
87,1 • at least 80% of the portfolio of a REIF should be invested in real
million
estate.
Source:
invest.gov.trPortfolio Infrastructure
Capital Markets
Brokerage Investment Trusts Funds
Management Providers
Capital Markets
An investment fund focused on ventures…
Securities
Venture Capital Investment Funds (VCIFs):
• established and managed by Portfolio Management Companies
Foreign or Venture Capital Portfolio Management Companies.
• can be sold to Qualified Investors
Mutual Funds Guaranteed • VCIFs are allowed to engage only in management of portfolios
comprised of the following assets and transactions:
Real Estate • Venture capital investments
Funds
Protected • Private and public debt instruments, and shares of joint-
Investment Funds
stock companies established in Turkey
Venture Capital • Foreign private and public debt instruments and joint-
Investment
Investment Funds stock company shares
• Time deposit and participation account;
Pension Funds • Investment fund units;
• Repo and reverse repo transactions;
• Warrants and certificates;
• Lease certificates and real estate certificates;
Net Asset Value, 2016 • Settlement and Custody Bank Money transactions;
• Cash collaterals and premiums of derivative transactions;
• Specially designed foreign investment instruments and
loan participation notes deemed appropriate by the
Board,
• Other investment instruments deemed appropriate by
TL the Board.
73,9 • at least 80% of the portfolio of a VCIF should be invested in
million
ventures.
Source: CMB
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