PARTICIPATION BANKS PARTICIPATION BANKS ASSOCIATION OF TURKEY PARTICIPATION BANKS ASSOCIATION OF TURKEY PARTICIPATION BANKS 2011 PARTICIPATION BANKS ASSOCIATION OF TURKEY PARTICIPATION BANKS ASSOCIATION OF TURKEY CONTENS PRESENTATION WORLD ECONOMY TURKISH ECONOMY Mr. FAHRETTİN YAHŞİ Locomotive of Economy: Turkey: Rising Foundations of Participation Developing Countries Star of World Banking System Getting 04 Even Stronger 06 14 TURKISH BANKING SECTOR GLOBAL INTEREST-FREE BANKING PARTICIPATION BANKS Turkish Banking Progressing World Watches Interest-free Participation Banks 22 on Solid Path 28 Banking Closely 34 Continue to Grow INTERVIEW ANALYSIS ANALYSIS Mr. OSMAN AKYÜZ Mr. FAHRETTİN YAHŞİ Mr. ABDULLAH ÇELİK “Remedy to Crises: 2012 Will Be Different For Bank Asya Maintains Interest-free Banking” World, Different For Turkey Growth in 2011, too 42 48 4 52 PARTICIPATION BANKS ASSOCIATION OF TURKEY CONTENS PARTICIPATION BANKS ASSOCIATION OF TURKEY ANALYSIS ANALYSIS FOUNDED IN 2002 Mr. UFUK UYAN Mr. V. DERYA GÜRERK Matter of Fact: We are one of First Five Ethical Banking Banks With Highest Score MEMBERS: PARTICIPATION BANKS 58 64 OPERATING IN TURKEY CHAIRMAN Fahrettin YAHŞİ Albaraka Turk Participation Bank Inc BOARD MEMBERS Albaraka Turk Participation Bank Inc. Asya Participation Bank Inc. Kuwait Turk Participation Bank Inc. Turkiye Finance Participation Bank Inc. FINANCIAL DATA FINANCIAL STATEMENTS SECRETARY GENERAL Osman AKYÜZ Main Financial Data and Financial Statements of Financial Statements Participation Banks, in Total and Separately SUPERVISORS 71 76 Süleyman SAYGI - İsmail GERÇEK HEAD OFFICE Kısıklı Caddesi No: 22 Altunizade 34662 Üsküdar/İstanbul TELEPHONE +90 216 651 94 35 (Pbx) FAX +90 216 651 94 39 WEB PAGE ALL BRANCHES www.tkbb.org.tr Participation Banks with all their Branches E-MAIL [email protected] 86 5 PARTICIPATION BANKS ASSOCIATION OF TURKEY PRESENTATION Mr. Fahrettin YAHŞİ Chairman of Participation Banks Association of Turkey Foundations of Participation Banking System Getting Even Stronger e have left one more success- the Participation Banks has climbed to 14 the world as well. In truth, according to the ful year behind. However, we thousand as at the end of 2011. figures as at the yearend of 2010, the size Wshould here note that every suc- The Participation Banking sector, of the total assets of the banks that oper- cess achieved in the past also brings along which has carried on the growth rate they ate on basis of the principle of interest- even bigger responsibilities for the future. achieved in early 2000’s, has actually real- free banking across the world has reached As starting a year laden with scenarios of ized a growth rate over that of the total of 1.056 US dollars and it is expected that this crises, we have to carry out those measures banking sector within the past five years. total sum will reach 1.2 trillion dollars as at against the crises in the best manner on In fact, the Participation Banking, which the end of 2012. one hand and continue our success on the represented around 1-2% of the Turkish Meanwhile, such institutions as the In- other hand. Banking sector as at the end of 2001, rep- ternational Islamic Liquidity Management The Participation Banking that has resented approximately 5% of the total as- Corporation (IILM), which was established reached the size of assets for TRY 56 billion sets of the Banking sector as at the end of in 2010, of which our country is also a as at the end of 2011; the volume of raised 2011 and 6% of the sector in the raised and founding member, which contributes to funds for TRY 40 billion; and the size of cred- allocated funds. In this respect, we observe the growth and development of the Partici- its for TRY 41 billion has proven to be very that there very great opportunities for the pation Banking sector, shall also contribute important for the Turkish economy. In fact, Participation Banking, which is expected to to the development of our sector in gen- the Participation Banks, which have contin- represent at least 10% of the total banking eral. In fact, on the global basis, an increase ued to expand the network of their branch- sector. in the communication and coordination es across the country in 2011 too, have in- On the other hand, those financial insti- among the Participation Banks signifies in- creased the total number of their branches tutions that operate on basis of the prin- crease not only in the sources of funds but to 685 as at the yearend, in which process ciple of interest-free banking continue to also in the liquidity opportunities as well as the total number of the staff employed by grow fast not only in our country but in the sharing of the knowledge and experi- 6 PARTICIPATION BANKS ASSOCIATION OF TURKEY PRESENTATION ences accumulated so far. As a matter of could be carried out in order to provide our fact, the interest in such products as Sukuk, customers with more innovative products Morabaha Syndicated Loans, wherewith and services. In truth, the Research and our Participation Banks began to deal, is di- Development Studies we shall carry out by rectly related to the global increase in the forming synergy together shall greatly con- demand on the said products. tribute to the development of the sector. As the Association of Participation On the other hand, noteworthy relations Banks, it is among our priorities in the new have been established between the Arab period to further enlarge the share of our world and Turkey by means of the policies sector in the cake. In truth, considering our that have been performed in a conscious outstanding robust structure there is no and successful manner. Of course, the reason not to succeed therein nor we do stable graphics of the Turkish economy lack anything not to be able to cope with tion is to be established so that the philo- and politics as well as the positive progres- the obstacles we shall encounter with on sophical basis of the concept of the Partici- sion of the banking sector have greatly in- our path. Again, it is here to be noted that pation Banking and the requirement there- creased the interest of the Gulf countries in such factors as earning our sector new ac- of can be explained better is to be brought our country, parallel to which the Sukuk, an tors, the revision of the range of products on the agenda. If the system is established instrument that has long been anticipated in consideration of the new requirements, on an academic foundation and the infor- by the sector, which will make Turkey even ensuring the market to get deeper as it is mation sharing is satisfactorily ensured in more attractive for the Gulf countries, is expanding, expertise in projects financing the society, we shall have gained momen- also being enforced. and investment banking as well as the ex- tum in direction of the determined targets. Finally, I hereby wish that all the here- pansion of Profit-Loss Sharing projects shall The Participation Banks are expected to tofore mentioned developments be to the carry the sector to even farther stations. act in coordination in an effort to enhance benefit of our sector in sincere belief that Although a quarter century has elapsed the depth of the market so that the Par- all the obstacles shall be coped with in our ever since, we still endeavor to tell about ticipation Banking can be offered to even endeavors to achieve our goals in coopera- the sector. In fact, that an academic institu- more customers. Besides, joint operations tion as a sound structure. 7 PARTICIPATION BANKS ASSOCIATION OF TURKEY WORLD ECONOMY Locomotive of Economy: Developing Countries ■ The world economy has suffered from the calamities of the earthquake and tsunami, debt crisis and civil wars in 2011, which all have decelerated the growth rate of the world economy. ■ In 2011, the growth rate of the world economy has realized at 3.8%, wherein while the average growth, rate of the developing countries has realized at as high as 6.2%, in the accomplishment whereof the roles of China with a growth rate of 9%, of Turkey he western countries that achieved with high added value. In brief, the world with a growth rate of 8.5% and the Industrial Revolution in the 18th economy has progressed under the leader- of India with a growth rate of TCentury have acted as the locomo- ship of the developed countries. 7.4% have actually been great. tive of the world economy ever since that Nevertheless, the situation seems to time. Again, the developing countries have have entirely reversed during the past ■ Thus, the developing undersigned inventions; pioneered in tech- years. If we might say so, ‘’the sun is be- countries have realized fast nological innovations and materialized ginning to rise in the east anew.’’ In truth, gigantic investments in such vast fields as the world economy has been developing growth in 2011, thereby from energy to finance, as from food to thanks to the fast pace of growth of the de- becoming the locomotive of heavy industrial facilities, whereby having veloping countries under the leadership of the world economy. been utterly influential through products China, India, Brazil and Turkey, which fact 8 PARTICIPATION BANKS ASSOCIATION OF TURKEY has actually been attested by the reports of IMF, the World Bank, OECD and many other Table -1: Growth in World Economy (2007 – 2013) international institutions. Growth Realization Estimations The world economy, which has been (Real GDP Annual % Variance) WORLD ECONOMY struggling with the global financial crisis, 2007 2008 2009 2010 2011 2012 2013 which broke out in 2007, got deeper in World Economy 5,3 2,8 - 0,6 5,2 3,8 3,3 3,9 2008 and was abated in 2009 by means of Developed Economies 2,7 0,2 - 3,2 3,2 1,6 1,2 1,9 the measures taken, gave the signs of recu- USA 1,9 0,0 - 2,6 3,0 1,8 1,8 2,2 peration in 2010.