A foreign partner would tie us down

Akbank Board Chair Suzan Sabancı Dinçer says that we are in a period when the dynamics of the global economy have changed. She believes that, even if this change has had a short-term negative impact on Turkey, the medium-term prospects are sound. “The international financial markets will stabilize again. If we apply intelligent policies then the capital inflow into our country can accelerate again,” says Dinçer, adding that Akbank has not made any revisions to its targets. Dinçer notes that there are many opportunities for rapid growth in banking and says: “We have an organic growth strategy. We particularly believe that a foreign partner would be a bind for us.” We spoke with Akbank Board Chair Suzan Sabancı Dinçer about the global markets, their effects on Turkey and Akbank’s realities.

Capital: The first eight months of 2013 have passed. How do things look?
- It is the composition of growth that is important now. It is particularly important for Turkey to achieve high, sustainable growth. Turkey needs a more balanced relationship between consumption and investment. During this process we should plan to reduce our structural current account deficit in stages until it reaches a reasonable level.

Capital: Turkey started the year in a positive frame of mind but now things have become more negative. How do things look from your perspective?
- Even if the direction of the flow of funds changed from May onwards and Turkish Lira denominated instruments suffered a parallel loss in value, there has been a visible recovery since the beginning of September. Turkey’s medium-term growth prospects remain sound. The current account deficit is still high but, particularly when the gold trade is excluded, it is declining. In the future, the Turkish economy will grow in a manner that will make investments productive. The international financial markets will stabilize again. If we follow intelligent policies then capital inflows into Turkey can accelerate again.~

Capital: What are your forecasts for growth at year-end and in 2014?
- Our forecast for growth in 2013 is 3-4 per cent. We think that it will be closer to 4 per cent. Our forecast for 2014 is 4.5-5 per cent.

Capital: Coming to banking... Will there be a major decline in profits as a result of the turbulence?
- In fact, we should evaluate this year by dividing it into two parts. In the first six months of the year there was a strong growth in profits when compared with the previous year. But the situation in the second half of the year has been mixed. Banks need to adapt themselves to this new era which can be described as one of “interest rate fluctuations”. Banks reflect movements in market interest rates and costs in their loan costs.

Capital: How is Akbank itself doing?
- We are continuing with the growth policies that we foresaw for 2013 withoutmaking any concessions in terms of our approach to risk management. This year the bank will open 45-50 new branches and employ approximately 1,600 new personnel, Last month we secured a securitized loan of approximately $1.5 billion. Even though interest rates have been rising, we have reduced our loan costs by 60 basis points when compared with last year. In addition, we have accelerated our work on increasing our productivity and we are achieving positive results.

Capital: Will banking continue to flourish next year?
- The banking sector’s return on equity is around 14.5 per cent. Our forecast for inflation is around 7-7.5 per cent. When one takes into account the rate of inflation and the risks that the banks take, our sector offers a low return for investors. When we consider the term risks and fluctuations on the markets, I think that a rate of return on equity of around 20 per cent would be one that would be more likely to attract investors. In addition, we have recently seen a lot of decisions being taken about the banking sector. This creates questions in the investors’ minds. As well as this, we have a Turkey which has the desire, the motivation for growth and targets for 2023. Over the last 10 years, our per capita national income has tripled. We have a growing middle class that is becoming wealthier. But, despite these developments, there are still 18-19 million people in Turkey who do not use banking services at all. This creates a great dynamism.~

Capital: Have you revised your targets for 2013 and afterwards? What is your growth strategy?
- We have not revised our targets. In the first half of this year our total assets grew by 8 per cent to TL 176 billion. We increased the cash credits we provide to support the economy to TL 104 billion. We shall open around 45-50 new branches in the year as a whole and employ 1,600 new personnel.

Capital: We know that you were not looking for a partner. Has there been any change in this strategy?
- As the moment we are focused on an organic growth strategy through utilizing the important opportunities for growth provided by our banking sector. As a result, at the moment we are not looking for a partner. We particularly think that a foreign partner would be a bind for us.