Vakıfbank’s General Manager Bilal Karaman

“We will launch small branches”  

The decision to move both public banks and the Central Bank to Istanbul has been a matter of discussion for a long time. What are your views about both this decision and Istanbul’s becoming a finance center? 

The purpose of meeting non-financial sector’s increasing need for credits lies at the center of strategies for growth and market share enlargement of both domestic capital and foreign capital banks. In order to extend more credits to non-financial sector, expand individual credit portfolios and to increase the transaction volume of foreign trade they serve as intermediaries, banks have naturally increased their activity in and around Istanbul where both non-financial sector and economic activity are intensely located. Again, as a result of all these reasons private banks have moved their headquarters to Istanbul. We also believe that moving to Istanbul in order to get closer to our customers and hence to non-financial sector will make a vital contribution to our bank. For this purpose, necessary preparations have been started by our bank. 

The fact that Istanbul singly used 37% of credits lent by domestic banks in 2006 and supplied 43% of tax revenues in the budget also prove how important and necessary it is to move to Istanbul in economic terms. Istanbul has considerable advantages as to becoming a finance center. With its geographical position, climate and most importantly it’s young, dynamic and qualified workforce Istanbul has the potential to become a finance center if required legal arrangements are made and incentives are provided. Banks Association of Turkey (TBB) has submitted a paper it prepared about this issue to our government. Realization of this project will make a great contribution both to Istanbul and to national economy. 

In the last one year period Vakıfbank made its name mentioned through the initiatives it took in individual banking. Can we learn about your target of market share in the individual banking?

 The intensive competition in the individual banking field has caused banks aiming to increase their market share to expand product range and follow customers’ demands more closely. Vakıfbank also aims to increase customer satisfaction through innovative products it offers in different customer segments in accordance with its customer-focused approach.  In 2007 especially after we began to implement in the middle of the year our consumer finance campaign under the brand name TİK which has a serious technological infrastructure behind it, our consumer credits increased by 61%. In that period we increased our housing credits by 26%. In order to establish also in housing credits financing the institutional approach which we want to have in every field of business, we set up the Housing Finance Directorate this year. With the help of our team that is specialized only in this area, we will increase our share in this field by following large housing projects more closely. In order to strengthen our position in the increasingly competitive environment, Vakıfbank will launch new branches in 2008 that are based in relatively smaller locations operating with fewer personnel and marketing only individual banking products. 

Do you consider the current market conditions suitable for a second public offering? Can there be such a development for Vakıfbank soon? 

I say it regardless of market conditions: A secondary public offering for Vakıfbank is not in question. 

There appeared news about the private placement of Vakıfbank’s shares on economy sections of newspapers recently. Was any decision made regarding this issue?

 The Council of Ministers is the authority that is entitled to sell Vakıfbank’s shares which are controlled by the General Directorate of Foundations and also to specify the methods and basis of this sale. At this stage no decision whatsoever has been made as to the privatization of Vakıfbank. 

Are Turkish banks affected by the liquidity crisis in the world? Have you observed any problem such as difficulty with borrowing or rise in cost?

 In a period when global economies and financial markets are integrated with each other at such a high level, it is impossible for Turkish economy and banks not to get affected by the liquidity crisis. Happily we see that the stable economic and fiscal policies that have been followed for the last 5-6 years in Turkey decreased our economy’s vulnerability to this type of global fluctuations. Due to the liquidity crisis, it seems like difficult to reach additional resources in foreign markets in the first half of 2008. Renewal of the existing borrowings, however, will come out with a certain interest margin rise. The cause of those rises in cost is not that Turkey’s risk premium has increased, but that credit borrowing cost increases have been reflected by creditors in the credits they extended. 

What are Vakıfbank’s plans for the following periods?

Our primary target at Vakıfbank is to complete the restructuring works we started in accordance with customer-focused banking approach and to secure uninterrupted functioning of the new structure. We aim to strengthen our position in the sector by a stable, profitable and sustainable growth when we try to reach this target. In the long run, all the investments made at Vakıfbank are meant to create a Vakıfbank which shapes the sector and the country alike with its corporate culture, organizational structure and staff quality; which brings about the changes needed for its long-term goals using its internal dynamics; and which takes it as its principle to create value for shareholders, customers, business partners and for the society it operates in. We want to become the best bank of Turkey in every sense of the word by forming this structure.