FINANCIAL SERVICES
IN TURKEYMay 2018
Agenda
Summary
Banking and Financial Intermediary
Capital Markets
Insurance
Turkey’s Competitive Landscape
Executive
SummaryTurkish financial services offer significant opportunities to grow..
Resilient and attractive
Strong Banking System
Favorable Investment
Climate
A key driver of the Turkish financial sector has been its robust economy with a bright future. Over the past 15 years, Turkish
economy has been growing with an average annual real GDP growth rate of 5.7 per cent and the growth momentum is expected to
continue.
Turkey’s economic growth has resulted in income growth and a growing robust middle class with increasing purchasing power.
As Turkish economy has expanded, it has integrated with the global economy with a staggering increase in its volume of
international transactions. Such developments have further stimulated economic activity, thus expanding financial activities.
The Turkish financial sector proved resilient during the global financial turmoil in 2009 as well as the ensuing economic crisis, thanks
to the regulatory reforms and structural overhaul that the government implemented in the wake of the country’s own financial
meltdown in the early 2000’s. In fact, the reforms in the sector boosted investor confidence so much that the industry has attracted
$51 billion during the past 15 years.
Banking dominates the Turkish financial sector, accounting for over 70 percent of overall financial services, while insurance services
and other financial activities also show significant growth potential. There are 51 banks in Turkey (33 deposit banks, 13 development
and investment banks, 5 participation banks). Out of 51 banks, 21 hold significant foreign capital (30% of total assets are held by
foreign investors).
Unsaturated Insurance
Sector
The Turkish insurance market is still underpenetrated (1.5% of GDP) compared to peer countries and will provide significant
potential as new insurers set up shop and acquire a share of the relatively untapped Turkish market. Turkey has seen strong
economic growth fueled in part by a young and dynamic population that is increasingly in need of financial products and services.
Istanbul Financial
Center
Turkey has also set specific economic targets to achieve by 2023, the centennial of the Republic. One of these targets is to
transform Istanbul into a prominent financial center. Turkey’s large and young population, qualified labor force, and rapidly
developing markets along with its geo-strategic location, makes Istanbul an ideal candidate for an international financial hub. Since
the government launched the project for Istanbul Financial Center, Istanbul has rapidly made progress and is now considered among
emerging financial centers in the world.
Evolution of
Financial ServicesTurkey’s financial markets have been in a constant state of evolution..
Source: : BRSA, CMB
1982-2000 2001-2006
Personal Pension Savings and Investment System Law
Banking Act, Law No. 5411
Regulation on Measurement and Evaluation of Capital Adequacy of Banks
Mortgage Law, Official Gazette No. 26454
Implementation of Basel II standards in Turkey
Record profitability of the banking sector in Turkey
Law No. 6361 regarding Financial Leasing, Factoring and Financial Institutions
Establishment of Insurance Information and Monitoring Center - TRAMER, SAGMER, HATMER, HAYMER
All local or foreign insurance, reinsurance and pension companies operating in Turkey are members of the Insurance Association of Turkey
New Capital Market Law No. 6362
2007-2012 2013-…
Capital Market Law
Istanbul Stock Exchange (ISE) Market opens
Banking Regulation And Supervision Agency (BRSA) founded
Consolidation of the Market from 100 Banks to 49 Banks
Takasbank is Authorized by CMB as the National Numbering Agency of Turkey
Start of internet banking services
Milestones of Turkish Financial Services
Restructuring of Istanbul Stock Exchange and Establishment of Borsa Istanbul A.Ş.
Implementation of Basel III standards in Turkey
State-owned banks opened up participation banks
New regulatory framework for Payment and Electronic Money Institutions
Electronic Fund Trading Platform of Turkey (TEFAS) began to operate
Structure of
Financial Servicesfunctioning institutional settings with a strong legal framework..
Source: TCMA
BANKING CAPITAL MARKETS INSURANCE
Banking Regulation and
Supervision Agency (BRSA)Capital Markets Board (CMB) Undersecretariat of Treasury
-Banks’ Association of Turkey
-Participation Banks’ Association of
Turkey
-Association of Financial Institutions
-Turkish Capital Markets
Association (TCMA) -Insurance Association of Turkey
-Banks
-Participation Banks
-Savings Deposit Insurance Fund
-Leasing Companies
-Factoring Companies
-Consumer Finance Companies
-NPL Management Companies
-Banks
-Brokerage Firms
-Asset Management Firms
-Investment Trusts
-Central Registry Agency
-Settlement and Custody Bank
-Capital Markets Licensing and
Training Agency
-Investor Compensation Center
-Public and Listed Companies
-Rating, Appraisal, Audit Firms
-Insurance Companies
-Private Pension Companies
-Private Pension Funds
-Borsa Istanbul (BIST)
SECTORS
REGULATORS
INDUSTRY
REPRESENTATIVES
& ENABLERS
PLAYERS
FDI Flows into Turkish Financial Sector, 2002-2017Asset Size of Turkey’s Financial Sector (TL Billion)
Financial
ServicesTurkish financial sector, led by banking, has been rapidly growing while attracting
tremendous amount of foreign direct investment (FDI)…
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Banking
Central Bank
Insurance and Private Pension
Other
1,131
4,830
CAGR
18%
78.0%
15.4%
6.6%
$51BILLION2002-2017
CAGR
2008-2017
Share
2017
Banking 18 67
Central Bank 15 8
Insurance & Pension 19 3
Other 17 22
Other includes: BIST capitalization, securities, consumer finance, real estate investments, investment
trusts, asset management and venture capital investment trust assets
Source: CBRT, BRSA, TCMA, IAT, CBRT, AFI, BIST
USD/TL as of 29.12.2017: ₺3.78
*Activities of Holding Companies and Other Activities Auxiliary to Financial Services
Banking
Insurance
Other
Agenda
Summary
Banking and Financial Intermediary
Capital Markets
Insurance
Turkey’s Competitive Landscape
Banking There are 51 banks in Turkey with a total asset size of 3.3 trillion TL..
Source: BRSA, USD/TL as of 29.12.2017: ₺3.78
Number of Banks, 2017
33
13
5
51Deposit Banks
Participation Banks
Development & Investment Banks
₺3.3TRILLION
2017
TOTAL
BANKING
ASSETS
₺408BILLION
₺346BILLION
₺311BILLION
₺293BILLION
₺280BILLION
TOP 5 BANKS BY ASSET SIZE, 2017
Ownership by Asset Size, 2017
36%
36%
28%State-owned
Foreign-owned
Locally-owned
Total Loans as % of GDP (2016)
BankingDespite double-digit growth in the asset size, Turkish banking sector still has significant
potential for growth relative to its economy..
206%
159%
149%
146%
145%
119%
84%
72%
66%
France
EU28
Germany
Spain
Italy
Greece
Czechia
Bulgaria
Turkey
Source: BRSA, TBB, ECB
Turkish Banking Asset Size as % of GDP
53%
105%
40%
50%
60%
70%
80%
90%
100%
110%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Total Asset Size as % of GDP (2016)
374%
291%
248%
244%
235%
200%
127%
107%
105%
France
EU28
Germany
Spain
Italy
Greece
Czechia
Bulgaria
Turkey
Total Deposits as % of GDP (2016)
182%
169%
149%
148%
147%
121%
77%
76%
56%
France
Spain
Italy
EU28
Germany
Greece
Czechia
Bulgaria
Turkey
Asset Growth (Billion TL)
Asset Composition Liability Composition
BankingWhile growing at full speed, the banking industry has also diversified its
assets and liabilities..
Source: BRSA
USD/TL: ₺3.78
as of
29.12. 2017
32%
65%
40%
12%
15%15%
12%8%
0%
25%
50%
75%
100%
2004 2017
Other Assets
Cash + Banks
Securities
Loans
62%53%
11%
15%
0%5%
15%11%
11%16%
0%
25%
50%
75%
100%
2004 2017
Other Liabilities
Shareholder’s Equity
Securities Issued
Banks
Deposits
306
3,258
-
500
1,000
1,500
2,000
2,500
3,000
3,500
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Lending Growth of Participation Banks (TL Billion)
14 1824
3139
48
67 70
7984
107
0
20
40
60
80
100
120
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Asset Growth of the Participation Banks (TL Billion)
19 2634
4356
70
96104
120133
160
0
25
50
75
100
125
150
175
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
BankingParticipation banks have been outperforming the overall banking industry in Turkey,
but still have significant potential for growth..
• 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 160 billion by
the end of 2017, growing at
an impressive CAGR of
23.5% since 2007. The share
of participation banks in
banking sector assets
increased from 3.3 % in
2007 to 4.9% in 2017.
Source: Participation Banks Association of Turkey (TKBB), USD/TL as of 29.12.2017: ₺3.78
Participation Banks’ Asset as % of Total Banking Assets
3.3%
4.9%
2%
3%
4%
5%
6%
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Participation Banks’ Loans as % of Total Banking Loans
4.9%
5.0%
2%
3%
4%
5%
6%
7%
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Loans (TL Billion)
Banking Loans and deposits have been rapidly increasing..
Source: BRSA, USD/TL as of 29.12.2017: ₺3.78
Breakdown of Loans (2017)
17.9%
15.1%
9.5%
9.2%
8.6%6.7%
Personal Laons (Other)
Manufacturing
Personal Loans (Housing)
Construction
228 296 329 444 551 711
893 1,097
125 163 200
271 333
389
422
513
173 224
266
332
356
385
420
488
526 683
795
1,047
1,241
1,485
1,734
2,098
-
500
1,000
1,500
2,000
2,500
2010 2011 2012 2013 2014 2015 2016 2017
Consumer Loans & Credit Cards
SME Loans
Commercial & Corporate LoansWholesale & Retail Trade
Electric, Gas, Water Resources
Deposits (Billion TL)
434 460 520 561 661 715 845
954 181 221 233
331 375
519
591
732
2 14
19
21
16
11
17
24
617 695
772
946
1,053
1,245
143
1,711
-
250
500
750
1,000
1,250
1,500
1,750
2010 2011 2012 2013 2014 2015 2016 2017
Presious Metals FX TL
Depositors (2017)
Natural Persons 59.0%
Corporate36.0%
Public Institutions
5.0%
Deposits by Maturity (2017)
1 to 3 Months53.1%
Checking Account21.2%
3 to 6 Months4.1%
6 to 12 Months3.7%
1 year +4.1%
BankingSuccessful risk management has also enhanced stability and efficiency of the banking
industry with sound financial indicators..
Source: BRSA, IMF
Capital Adequacy Ratio
NPL Ratio, 2017*Non-Performing Loans / Total Gross Loans (NPL Ratio)
6.0%
5.3%
2.9%
0%
2%
4%
6%16.4%
10.2%
10.0%
8.0%
4.2%
3.6%
2.9%
1.7%
0.7%
Italy
Russia
India
Romania
Hungary
Brazil
Turkey
Germany
Switzerland
16.9%
0%
5%
10%
15%
20%
25%
30%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Legal Limit: 8%
Target: 12%
Legal Limit (Basel III): 10.5%
Capital Adequacy Ratio, 2017*
19.3%
19.0%
18.1%
16.9%
16.4%
16.1%
15.3%
12.8%
11.8%
Germany
Romania
Brazil
Turkey
Hungary
Switzerland
Italy
India
Russia
Net Income (Billion TL)
Banking Banking sector has sustained double-digit growth rates in profit..
Source: BRSA USD/TL as of 29.12.2017: ₺3.78; *Net interest income / average total assets
Income Statement (Billion TL)
MarginsReturns
2.9 5.6 6.5 6.0
11.4
14.9 13.4
20.2 22.1
19.8
23.5 24.7 24.6 26.1
37.5
49.1
0
5
10
15
20
25
30
35
40
45
50
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
2017 2016 2007
Total Interest Income 247.5 194.7 70.6
Total Interest Expenses 134.1 103.4 44.5
NET INTEREST INCOME/ EXPENSE 113.4 91.3 26.0
Special Provisions for Non performing Loans 19.8 21.5 3.0
NET INTEREST INCOME/ EXPENSE AFTER PROVISIONS 93.6 69.9 23.1
Total Non-Interest Income 55.7 46.5 16.0
Total Non-Interest Expenses 77.8 67.6 22.2
Total Other Non Interest Income /Expense -10.2 -1.5 1.3
TOTAL NON-INTEREST INCOME/EXPENSE 32.3 22.6 4.9
PROFIT/LOSS BEFORE TAX 61.3 47.3 18.2
Provision for Taxes 12.2 9.7 3.3
NET INCOME 49.1 37.5 14.9
14.28%
16.04%
2016 2017
Retun on Equity
1.89%
2.04%
2016 2017
Retun on Assets
3.6%
3.8%
2016 2017
Net Interest Margin*
40%
38%
2016 2017
Cost / Income Ratio
Financial
LeasingFinancial leasing transactions has been growing with double-digit numbers..
Source: Association of Financial Institutions (AFI), Average USD/TL in 2017: ₺3.65
Financial Leasing Transactions (Billion TL)
8.4 9.6
13.9
17.1 17.3 18.6
22.6
0
5
10
15
20
25
2011 2012 2013 2014 2015 2016 2017
Sectoral Distribution (2017)
Heavy Equipment and Constrution Machinery 27%
Real Estate 21%
Other Machinery and Equipments 20%
Metal Processing Machinery
7%
Textile Machinery
7%
Other Sectors
18%
Leasing in Numbers
2017
Companies 25
Employees 1,453
Clients 57,605
Branches 139
Financial Leasing Net Profit/Loss (Million TL)
521
443 451
526
809
922952
0
100
200
300
400
500
600
700
800
900
1,000
2011 2012 2013 2014 2015 2016 2017
Financial Leasing Revenues (Billion TL)
1.11.4
1.7
2.2
2.7
3.1
3.7
0
1
1
2
2
3
3
4
4
2011 2012 2013 2014 2015 2016 2017
Factoring Factoring turnover has more than doubled over the past six years..
Source: BRSA, AFI, Average USD/TL in 2017: ₺3.65, end-2017: ₺3.78
Factoring Turnover (Billion TL)
70.8 77.3
93.8
116.0 119.7 122.8
145.0
0
25
50
75
100
125
150
2011 2012 2013 2014 2015 2016 2017
Sectoral Distribution (2017)
Wholesale & Retail Trade
15.5%
Construction11.6%
Textile Manufacturing 8.5%
Motor Vehicles Manufacturing
8.2%
Mining7.0%
Other Sectors49.2%
Factoring in Numbers
2017
Companies 61
Employees 4,778
Clients 109,658
Branches 388
Factoring Operating Revenues and Net Profit (Million TL)
606 759 612 772505
8481153
2,037
2,614 2,425
3,270 3,665
4,316
5,501
0
1,000
2,000
3,000
4,000
5,000
6,000
2011 2012 2013 2014 2015 2016 2017
Profit
Revenues
Factoring Receivables (Billion TL)
14.216.3
20.1
24.7 24.9
31.1
41.6
0
5
10
15
20
25
30
35
40
45
2011 2012 2013 2014 2015 2016 2017
Consumer
FinancingConsumer financing has been growing with an impressive performance..
Source: BRSA, AFI, Average USD/TL in 2017: ₺3.65, end-2017: ₺3.78
Consumer Financing Assets (Billion TL)
8.9
11.6
16.0
20.3
27.2
32.8
39.1
0
5
10
15
20
25
30
35
40
2011 2012 2013 2014 2015 2016 2017
Consumer Financing Receivables
8.410.7
14.5
18.1
23.8
27.8
34.3
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
0
5
10
15
20
25
30
35
2011 2012 2013 2014 2015 2016 2017
Receivables (Billion TL, LHS) NPL (%, RHS)
Consumer Financing Operating Revenues & Net Profit (Million TL)
135 203 244 291438 452
800840
1,233 1,456
1,817
2,404
3,372
4,243
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2011 2012 2013 2014 2015 2016 2017
Profit
Revenues
Agenda
Summary
Banking and Financial Intermediary
Capital Markets
Insurance
Turkey’s Competitive Landscape
Capital
MarketsTurkish capital markets have been undergoing a profound transformation..
CMB wasestablished
Istanbul StockExchange wasestablished
Capital MarketsLaw passed
Fully automatedtrading startedCorportateGovernancePrinciples werepublished first ETF was established
Liberalization of Foreign Investment
Public DisclosurePlatform wasintroduced
First Islamic Bond was issued
New IFRS regulationwas adopted
New CapitalMarkets Law passed
Borsa Istanbulmerged withIstanbul Gold Exchange andDerivativesExchange
ISE demutuailizedand transformed toBorsa Istanbul
Electronic FundDistribution Platform of Turkey (TEFAS) began tooperate
Capital Markets Board (CMB)
TCM
A(T
urk
ish C
apit
al M
ark
ets
Ass
ocia
tion) Banks
Brokerage Firms
Portfolio Management
Companies
Investment Trusts
Equity Market Debt Market
Public Companies
Listed Companies
Funds (TEFAS)
Public Offering
of Equities
of Corporate Debt
BIS
T(B
ors
a Ist
anbul)
Takasbank
Central Registration Agency
Licensing and Training Agency
Rating Companies and
Independent Audit Companies
Institutions Products Infrastructure Providers
Capital
MarketsTurkish capital markets promise more growth...
COMPANIES
TRADED AT
BIST2017
INSTITUTIONAL
INVESTORS
PORTFOLIO
411
$45BILLION
MARKET
CAPITALIZATION
OF BIST
FOREX
TRADING
VOLUME
$2.3TRILLION
20172017
$18CORPORATE
BONDS
MARKETBILLION
2017
$227
2017
Source: TCMA
EQUITY
INVESTORS1+
MILLION2017
BILLION
Mutual Funds35.1%
Pension Funds47.1%
Real Estate Investment Trusts 16.0%
Venture Capital Companies 1.5%
Investment Trusts 0.2%
143.8%
115.2%
90.1%
67.6%
51.3%46.5%
40.8% 39.3% 36.3%28.0%
Bursa Malaysia Korea Exchange National StockExchange of India
BME SpanishExchanges
Indonesia StockExchange
B3 SA Brasil BolsaBalcao
Moscow Exchange Bolsa de Valores deColombia
Bolsa Mexicana deValores
Borsa Istanbul
MARKET CAPITALIZATION AS % OF GDP2017
Agenda
Summary
Banking and Financial Intermediary
Capital Markets
Insurance
Turkey’s Competitive Landscape
45%Held by 5
insurers
Insurance Despite robust growth, Turkey still has an unsaturated insurance industry…
₺47TOTAL
ASSETS19% PREMIUM
GROWTH 2012-2017
₺152Including reinsurance
2017
BILLIONNon-life
38.3
Life & Pension
8.3
CAGR
GROSS
PREMIUMS
WRITTEN2017
Allianz12.9%
Anadolu11.8%
Axa7.3%
Mapfre6.8%
Aksigorta6.6%
NON-LIFE
INSURANCE
MARKET
SHARETop 5 Market Leaders, 2017
Held by 5
insurers
Ziraat20.3%
Allianz 9.1%
Metlife8.4%
Anadolu 8.4%
Halk 7.5%
LIFE
INSURANCE
MARKET
SHARETop 5 Market Leaders, 2017
54% AUTHORIZED
INSURERS61 2017
BILLION
Source: Insurance Association of Turkey, OECD
9.0%
8.0%
5.5%5.0%
3.3% 3.1% 2.9% 2.6%2.2%
1.8% 1.5% 1.4%
OECD Italy Spain Chile Brazil India Poland Argentina Mexico Indonesia Turkey Russia
INSURANCE PENETRATION (Gross Direct Premiums as % of GDP, 2016)
Insurance Turkish insurance industry is characterized by various compulsory insurance products..
COMPULSORY INSURANCE PRODUCTS
Motor third party liability for bodily injury and
property damage. Professional liability cover for tour operators.
Earthquake insurance on private dwellings. Medical malpractice insurance for doctors and
dentists.
Third party liability for bodily injury and medical
expenses for passengers on intercity and
international transport.
Professional indemnity insurance for independent
auditors
Third party liability for passengers on vessels
registered to carry 12 or more passengers.
Sea pollution liability for companies situated near
the shoreline
Personal accident cover for intercity coach
passengers.
Public liability insurance for private security
guards.
Personal accident cover for miners. Third party legal liability and passenger liability
for aircraft.
Professional indemnity insurance for companies
providing professional services to banks.
Insurance of goods that are subject to finance
leasing.
Liability of companies engaged in the production,
storage, and handling of LPG cylinders.
Professional indemnity insurance for electronic
signature certificate providers.
Liability insurance for companies engaged in the production, storage, transport, and sale of
combustible, explosive or flammable materials.
Agenda
Summary
Banking and Financial Intermediary
Capital Markets
Insurance
Turkey’s Competitive Landscape
Real GDP Growth (Index: 2002=100)Ranking of Economies by GDP at PPP
100
125
150
175
200
225
250
275
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Source: TurkStat, OECD, World Bank, IMF, PPP: Purchasing Power Parity
13TH LARGEST
ECONOMY5.7 3.9 3.8 2.8 1.8
Robust
EconomyTrack record growth and bright future with proven resilience..
Average Annual GDP Growth (%), 2003-2017
Turkey Poland Romania Czechia Hungary
2003 2017 2021
2017 Real GDP Growth in G20
7.4%
6.8%
6.4%
5.1%
3.8%
3.1%
3.0%
2.9%
2.4%
2.3%
2.3%
2.2%
2.0%
1.8%
1.8%
1.7%
1.5%
1.5%
1.3%
1.0%
-0.8%
Turkey
China
India
Indonesia
G20
Korea
Canada
Argentina
EU
Australia
US
Germany
Mexico
France
UK
Japan
Russia
Italy
S. Africa
Brazil
S. Arabia
Fastest growing economy in G20
Source: CBRT, transactions cover gross inflows and outflows
International
TransactionsAs Turkish economy has developed, it has integrated with the global economy and
financial markets with increasing cross-border capital flows..
284
1,273
2002 2017
Financial Account
Income
Trade in Goods & Services
International Transactions Volume of Turkey ($ Billion)
62
228
2002 2017
Reserve assets
Other investment
Portfolio investment
Direct investment
148
682
2002 2017
Other investment
Portfolio investment
Direct investment
International Investment Position of Turkey($ Billion)
ASSETS LIABILITIES
Contribution to GDP Growth 2002-2017 (%)
74
31
22
-2
-25
Turkish Economy (GDP at current prices, $Billion)
Turkish economy has more than
tripled over the past 15 years and
is promising more growth in future
Source: TurkStat
Domestic
Consumption
Investment
Expenditures Stocks
Imports
Exports
236
851
2002 2017
..driven by a robust domestic
market and entrepreneurial
private sector which has spurred
investments and exports
Robust
EconomyDriven by a diversified structure, Turkish economy has more than tripled over the past
15 years..
Stock of Automobiles(millions of passenger cars)
The Rise of Turkish Middle Class(# of individuals by annual disposable income per capita)
Tripling Income per capita (GDP per capita, current prices)
GDP per capita in countries with population over 50 million, 2017
$3,581
$10,597
2002 2017
$59,501
$44,550
$39,869
$39,735
$38,440
$31,984
$29,891
$10,608
$10,597
$9,895
US (1)
Germany (2)
France (3)
UK (4)
Japan (5)
Italy (6)
Korea (7)
Russia (8)
Turkey (9)
Brazil (10)
Source: IMF, Turkstat, Euromonitor
High income (>$55K)
Upper-middle ($25K – $55K)
Middle ($10K – $25K)
Low ($5K – $10K)
Poor (<$5K)
2016
million
million
2002
21.3 million
23 million
17.8 million
3.3
1
3
10.8
million
40 million
21.2 million
5
million
Domestic
MarketTurkey’s economic growth has paved the way for the emergence of a sizeable middle-class
with an increasing purchasing power…
Annual House Sales (million of houses)
4.6
12.0
2002 2017
0.4
1.4
2008 2017
Working Age Population (15-64) (Index: 2014=100) Total Dependency Ratio (%, Age 0-14 & 64)/Age 15-64)
45
50
55
60
65
70
75
2014 2017 2020 2023 2026 2029 2032 2035
Europe
Turkey
90
100
110
120
2014 2017 2020 2023 2026 2029 2032 2035
Europe
Turkey
TURKEY EUROPE
5 3 1 1 3 5
0-4
10-14
20-24
30-34
40-44
50-54
60-64
70-74
80-84
90+
Female Male
5 3 1 1 3 5
0-4
10-14
20-24
30-34
40-44
50-54
60-64
70-74
80-84
90+
Female Male
Source: Turkstat, Eurostat, UN, 2016
Ag
e
Gr
ou
ps
(%
)
Ag
e
Gr
ou
ps
(%
)
Favorable
Demographicshalf of population under age 31..
Source: World Bank Global Findex 2017
Financial
InclusionDespite increasing income, Turkey still lags behind in financial inclusion as compared
to peer and advanced economies, giving room for growth in financial services..
Financial Inclusion Strategy
Financial EducationFinancial Consumer
ProtectionAccess to Financial Products
and Services
In order to address
financial gaps, Turkey
launched a national
Financial Inclusion Strategy
in 2014
Percentage of Adults with a Bank Account
99% 96% 95% 94% 93%87% 85% 84% 80% 76% 75% 74% 70% 69%
Germany UK Korea France USA Poland Malaysia China India Russia Hungary Chile Brazil Turkey
Source: Turkstat, IMD World Competitiveness Yearbook Executive Opinion Survey based on an index from 0 to 10; Eurostat
Skilled Workorce
with Cost Advantage
Turkey’s labor markets support the financial sector’s human resources need with a cost-
competitive labor base..
64.7
56.351.7 49.7
45.9 43.838.5
19.1
Luxembourg France Germany Italy UK Ireland Spain Turkey
6.0
6.76.9
7.0
7.27.5
7.6
Italy Spain Turkey Austria UK Ireland Luxembourg
Availability of IT Skills, 2017
0=Unavailable, 10=Available
5.9 6.06.5
7.1 7.3 7.57.8
Italy Spain Turkey Austria UK Luxembourg Ireland
Labor Cost per hour in Financial & Insurance Sector
2016 (EUR)
Availability of Finance Skills, 2017
0=Unavailable, 10=Available
271KPEOPLE EMPLOYED
IN THE TURKISH
FINANCIAL AND
INSURANCE SECTOR2017
Tech
Infrastructure
Turkish financial industry is also supported by university & industry collaboration
through a finance-focused technology development zone.
About
• Produce technological and financial information
• Make innovation in products
• Commercialize technological and financial
information
• Create investment opportunities in technology
intensive areas through ensuring the cooperation
of research companies and organizations with the
finance and manufacturing sectors
• Companies Operating in the Banking and Finance Sectors
• SMEs that produce hardware and software for the
financial sector
• Start-up Companies operating in the financial, money
and capital markets and software, information
technology and technology sectors
Target Groups
Source: http://finansteknopark.com.tr/
Strategic
Locationto manufacture, export and manage…
Source: *IMF and World Bank
PROXIMITY TO
MAJOR MARKETS1.5 billion people and $24T GDP
in Europe, MENA and Central
Asia at 4 hour flight-distance
CONNECTIVITYTurkish Airlines connects you to
246 destinations in 120 countries
Production base for MENA
Largest production facility worldwide
Exporting 85% of its production
Exporting 77% of its production
67 countries
80 countries
60 countries
30 countries
89 countries
72 countries
MANUFACTURING
& EXPORT HUB
FOR
MULTINATIONALS
AS WELL AS
MANAGEMENT
HUB FOR
MULTINATIONALS
Istanbul Financial
CenterTurkey is determined to bolster its capital markets and position, Istanbul, as an
international financial center.
STRATEGIC
LOCATION
SKILLED
LABOR
FORCE
Connecti
vit
y
Regio
nal
HQ
s
for
MN
Cs
• 6.6 million labor force; ~2 million with higher education
• One of the largest concentrations of universities in the
world with 58 universities
• 87K employed in financial and insurance services
• 113K employed in information and communication
Source: Turkstat, Eurostat, Higher Education Council, IMF
2017
• New Capital Markets Law
• New Commercial Code
• Istanbul Arbitration Center
• Unifying All Exchanges (Stock, Derivative, Gold,
etc.) under BIST
• New investment fund structures, capital-raising
products and listing procedures.
IMPROVING
LEGISLATION
THRIVING
LOCAL
ECONOMY AT
GLOBAL SCALE
$260BILLION
2017
260
253
237
218
213
211
200
IstanbulFinland
EgyptPortugalCzechia
RomaniaGreece
GDP (current prices, $Billion)
Useful Links
• Undersecretariat of Treasury: http://www.treasury.gov.tr/
• Central Bank of the Republic of Turkey: http://www.tcmb.gov.tr/
• Banking Regulation and Supervision Agency: http://www.bddk.org.tr/
• Capital Markets Board of Turkey: http://www.cmb.gov.tr/
• Borsa Istanbul: http://www.borsaistanbul.com/
• Turkish Capital Markets Association: http://www.tspb.org.tr/
• Takas Istanbul (Istanbul Clearing, Settlement and Custody Bank Inc.): http://www.takasbank.com.tr/
• Public Disclosure Platform: http://www.kap.org.tr/
• CSD of Turkey: http://www.mkk.com.tr/
• Banks Association of Turkey: http://www.tbb.org.tr/
• Participation Banks Association of Turkey: http://www.tkbb.org.tr/
• Insurance Association of Turkey: http://www.tsb.org.tr/
• Association of Financial Institutions: http://www.fkb.org.tr/
• Turkish Institutional Investment Managers’ Association: http://www.tkyd.org.tr/
• Turkish Investor Relations Society: http://www.tuyid.org/
• Association of Real Estate and Real Estate Investment Companies: http://www.gyoder.org.tr/
• Turkish Payment and Electronic Money Institutions Association: http://www.oded.com.tr/
• Capital Markets Licensing Registry and Training Services: http://www.spl.com.tr/
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