General Manager of Finansbank Sinan Şahinbaş

“Number of our branches will rise to 485”

Have you achieved your aims in the partnership you set up with the largest bank of Greece (NBG)? Do you think of carrying out projects with your partner also in the neighboring countries (Turkic Republics etc.)?   

It has been nearly 16 months since the sale of our shares to NBG. Finansbank has grown quickly in this process. This growth is revealed in every respect. NBG is a publicly traded bank both in Greece and in New York. So, it complies with some rules laid down by authorities there. It has brought us significant innovations and contributions with respect to such issues as, risk management and corporate governance. They also borrow some successful practices from us. Naturally, we borrow and implement the best practices from each other. We repaid the high-interest loans we had used, after the share transfer. NBG’s commitment to Turkey is not limited to the capital it has put in. As a result, there will be critical contributions from it regarding both fiscal structure and other issues in the coming period.  At the moment, Finansbank has no plan to expand into the neighboring countries. However, NBG’s expansion policy goes on in Southeastern Europe. Of course, this situation will bring benefits also to us in the period ahead. 

There occurred a considerable rise in the number of branches after the merger with NBG, but this rise was not reflected in market shares in deposits and credit. What causes do you attribute this picture to? 

As Finansbank we opened 101 new branches in total in 2006. We ended with 308 branches in 2006. Now we have 400 branches. That is to say, we opened 102 new branches in 2007. The increase in the number of our branches was reflected also in figures for credit and deposits share. The fall in our funding cost and the increase in project financing works were positive factors that affected Finansbank’s performance. Especially in credits we increased our market share to 6.2% from 5.5% which it was in the second quarter of 2006. It will be our purpose in the coming period to reach double digit market shares in all the products in retail banking. 

Particularly after the mortgage crisis, U.S. banks were accused of being unsuccessful at risk management. How do you think are the risk management marks for the banks in Turkey?

  We observe that banks operating in the market were utterly successful at risk management especially after the 2001 crisis. All our banks behave carefully in managing operational risk and credit risk. Since there is no subprime market in Turkey, our banks came out of the crisis without a scratch.  

Finansbank’s free float is below 1% and the bank wants to leave the stock exchange. What are the reasons for your preference for leaving the stock exchange instead of making Turkish shareholders in your profit by resorting to a secondary public offering?  

After its acquisition by National Bank of Greece, our bank’s free float fell down to 0.62%. The reason for our desire to leave the stock exchange is that there is no liquidity of our shares in the market. Our customers who want to either buy or sell our shares are carrying out transactions with nonliquid shares and having difficulties. Such nonliquid shares are not allowed to remain in other countries. Because of that, we are expecting regulation and we can say that the chief reason for our aiming to leave the stock exchange is to protect small investors. 

Do you think European companies which have partnerships in Turkey will have any effect on Turkey’s EU accession process? 

We see there is an increase in foreign acquisitions in every sector in Turkey. When we evaluate on the basis of banking sector; in the 30-month period beginning from early 2005 acquisitions have accelerated. After the realization of 15 foreign partnerships and acquisitions, the share of foreigners reached 38%. There were many important factors in the quick sale of banks, of course. One of those factors was the knowledge that there would be difficulties in meeting the capital requirement entailed by the Basel II regulations which were published in June 2004. The most important basis for foreign investors who approached the rising prices of banks positively was our country’s becoming a candidate country for the European Union in December 2004. Needless to say, there are other reasons for foreigners’ demand which is still going on. For example; the difficulty of banks which can not make new attempts in enlarging their market shares and assets in the European banking sector that reached saturation point by now. However, in developing countries like Turkey although they are shrinking, profit margins are higher than in Europe anyway. This situation is expected to go on like that for many years. In addition to that, while the number of banking customers in Europe is predicted to rise to 425 million by 2015 with an increase of 10 million; it is expected to rise to 48 million with an increase of 28 million. Within the framework of these estimates while 10 million customers will enter the European banking system, 28 million new customers will enter the Turkish banking system in the next 10 years. Even these figures reveal the great potential in our country. It is fairly possible that this potential for growth will bring benefits to economic processes of Europe. These partnerships may not be the leading players in the EU process, but they will form a driving force because of the presence of a win-win situation. 

What has foreign partnership contributed to Finansbank in terms of corporate governance?

 The efforts toward developing corporate governance in our bank which we have been making in recent years have gained speed with NBG’s becoming our principal shareholder. A new procedure was created taking into consideration the Banking Law and related local regulations in addition to corporate governance efforts of NBG. Due to NBG’s being listed at New York Stock Exchange, steps toward harmonizing with Sarbanes-Oxley Act were taken by our bank and an independent auditing company is measuring our adaptation level.

 What are included in Finansbank’s New Year agenda? 

We have made our Plan A on our New Year agenda including a budget with a view to grow as we did in 2007, while we set the Plan B as revising or slowing our growth target for 2008. But I can say it openly that even if Turkey changes for better or good, Finansbank will not revise its market shares geared towards growth. That means, our Plan A envisages growing in all instruments above the market average and our Plan B envisages again growing above average but cutting growth rates in parallel with the market. There will be a rise of 1,100 in the number of our employees in 2008. We plan to increase our 2008 year-end market share to 6.9% in total liquid loans and to 8% in personal loans. As for our share in total deposits, we plan to increase it to 4.8%. On the other hand, we aim to increase the number of branches to 485 in 2008 and the share in credit card market, which was 8% in 2007, to 9%.