The regulator cited article 8 of the Turkish banking law, which lists financial strength and transparency among issues that might contribute to the blocking of such an acquisition, although it failed to specify its exact reasons. The move follows a similar decision in early August when the Kuwaiti International Investor Co was told that its lack of financial strength meant it could not buy Adabank, and suggests that the Turkish authorities might be beginning to resist the rush of foreign investment that has greeted the recovery of the country’s banking sector.
Data from the Bank Association of Turkey and Austrian bank CA IB show that the sector has more than doubled in size since the 2001 crisis, with total assets up from TL250 billion ($192 billion) in 2003 to a projected TL592 billion by the end of 2007. With that growth have come foreign investment and consolidation, to the extent that the country’s top three banks, Garanti Bank, Akbank and Ziraat Bank, now account for more than 50% of total profits.
| Turkey’s banking sector set to grow... and grow |
| Bank assets in Turkish Lira |
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| Source: BAT, BRSA, CA IB estimates |
"Most investors are bullish on Turkey and have gone in quite heavily," says George Zois, an analyst at Fox-Pitt, Kelton.