Türkiye's top financial leaders convened on Tuesday to discuss the country’s evolving economic policies, financial system, strategies and transformative agenda amid global uncertainties.
The 4th Future of Finance Summit, organized by Daily Sabah’s parent company, Turkuvaz Media Group, gathered leading financial institutions, public and private banking executives, and regulatory authorities.
Addressing the event, Vice President Cevdet Yılmaz lauded the transformation Türkiye has undergone over the past two decades, attributing the progress to what he says is an economic vision built on strong foundations and forward-looking policies.
Between 2020 and 2023, Türkiye achieved an average annual growth rate of 5.9%, surpassing the global average of 2.6%.
"We aim to achieve a growth rate of 3.5% in 2024," Yılmaz said in a video message.
As of the third quarter of this year, Türkiye's annualized gross domestic product (GDP) has reached $1.3 trillion (TL 45.83 trillion).
"We anticipate that by 2027, our GDP will reach $1.8 trillion. With steady and sustainable growth, we expect our per capita income to exceed $15,500 in 2024 and surpass $20,000 by 2027," said Yılmaz.
He also emphasized the government’s determination to tackle inflation, which last month eased to its lowest level since mid-2023.
"Due to the successes in fighting inflation, the annual inflation rate has dropped to 47% as of November. We aim to reduce the inflation rate to single digits during the (medium-term) program period," he added.
Yılmaz credited the central bank’s bolstered reserves – now at $163 billion – and the projected reduction of the current account deficit to below 1% of GDP, as well as the country's risk premium declining to 150 basis points as indicators of economic resilience.
Robust capital adequacy ratio
Also speaking at the event, Banking Regulation and Supervision Agency (BDDK) President Şahap Kavcıoğlu spotlighted the banking sector’s robust performance, describing it as a cornerstone of the Turkish economy.
Kavcıoğlu highlighted the sector’s robust capital adequacy ratio of 18.1% as of October this year, well above the regulatory minimum of 8% and the 12% target threshold.
He said the sector's profitability continues to contribute to its equity.
"The net profit for the period has increased by 6.1% compared to the same period last year, reaching TL 516 billion," he noted.
Total loans have reached TL 15.4 trillion, while deposits total TL 18.2 trillion, he added. "This strong growth reflects the sector’s strength and adaptability," Kavcıoğlu said.
He also noted that non-performing loans (NPLs) remained low, at 1.8%, compared to the historical average of 3.2%.
Addressing the transformation underway in global financial systems, Kavcıoğlu emphasized the rising importance of digitalization, sustainable finance and new business models.
"We are witnessing a shift driven by geopolitical uncertainties, climate change, technological innovation and the evolving preferences of younger generations," he said.
To align more with international standards, the BDDK plans to implement Basel IV regulations by 2025.
Kavcıoğlu also announced regulatory support for participation finance, highlighting the establishment of development and investment finance institutions to enhance the sector’s competitiveness.
He highlighted the transformative potential of digital banking. Six new digital banks, including three participation finance institutions, have recently received operating licenses, reflecting the growing demand for innovative financial solutions.
"We aim to accelerate financial inclusion through service-model banking, enabling banks to offer services via third-party platforms," Kavcıoğlu said, describing it as a first in Türkiye's financial landscape.
Over $4.4B raised from IPOs
Capital Markets Board (SPK) President Ibrahim Ömer Gönül underscored the significant progress in Türkiye's capital markets, citing a surge in investor activity.
"We now have 7 million stock market investors and 5.4 million participants in investment funds," Gönül reported.
He highlighted the success of initial public offerings (IPOs), noting that 127 companies raised approximately TL 156 billion in the past three years.
In 2023 alone, 33 companies secured TL 57.4 billion through IPOs.
"Sustainable finance has been a focal point," Gönül said, revealing that Turkish companies issued TL 350 billion in green and sustainable bonds.
He also outlined plans to introduce new guidelines for sustainable and socially impactful investments.
Gönül pointed to the expansion of venture capital funds, with total assets surpassing TL 200 billion, and noted the growing role of real estate investment funds in housing finance.
The SPK’s focus on cryptocurrency regulation, he added, marked a significant step forward in safeguarding digital asset markets under the board’s supervision.
Total assets at $85 billion
Alpaslan Çakar, general manager of Ziraat Bank and the chair of the Banks Association of Türkiye (TBB), reflected on the global economic environment, marked by contraction in global trade volume, inflation, tightening monetary policies and geopolitical challenges.
He praised the government's medium-term program for its focus on structural reform and financial stability.
"The medium-term program was built on price stability, budget discipline, a sustainable current account deficit and structural reforms. We in the banking and finance sectors have formed all our policies within the framework of price stability and financial stability," said Çakar.
"Particularly on the growth side, there is a growth mechanism driven by external demand rather than domestic demand, and the current account deficit has fallen below 1%."
Reflecting on the banking's current status, he said the sector's total assets now stand at TL 30 trillion, equating to 76% of GDP.
"This is a significant figure for our country. However, when we look at the eurozone and more developed countries, we all know that this ratio can go to much higher levels," Çakar added.
He said total deposits had reached TL 18.2 trillion. "Their share in the balance sheet stands at around 60%," he noted.
"We have a loan volume of TL 15 trillion," Çakar said, accounting for 51% of the total balance sheet. "This can be much higher in certain periods and is likely to increase further," he added.
Çakar also pointed to international recognition as Türkiye has been removed from the Financial Action Task Force's gray list, and credit ratings agencies have been upgrading the country's credit ratings, which he says reflect the economic progress.
Selective lending
Addressing the summit, Halkbank CEO Osman Arslan emphasized the importance of selective lending under the medium-term program framework.
"Our understanding of selective credit, as outlined by the medium-term program, aims to contribute to investment, production, export, employment and ultimately reducing the current account deficit," Arslan explained.
Although the banking sector in Türkiye is developed, he said, "We haven't reached the scale of large banks in Europe or the U.S."
"The financial system needs to grow, but it's crucial to achieve this growth by expanding the real sector. Otherwise, resources and financial management become concentrated in the hands of a specific group," he noted.
Arslan addressed credit repayment performance, noting that non-performing loans rose slightly from 1.6% to 1.8% in 2023 but stressed this remains manageable.
"Indicators such as delinquency rates show no significant deterioration," he said, crediting robust monitoring mechanisms.
Record foreign funding
Vakıfbank CEO Abdi Serdar Üstünsalih highlighted 2024 as a very successful year, citing funding secured from abroad, adding that they have observed global development banks' interest in Türkiye.
Üstünsalih also stated that credit growth is expected to continue in 2025 due to the decline in inflation.
"It has been an extremely successful year for the sector in terms of securing foreign funding. This year, we surpassed $33 billion, which is a record," he said.
"The closest year to this record was 2017, when we secured $20 billion in funding."
Üstünsalih expressed optimism that the industry would ensure a "significant" inflow of funds in early 2025.
"We continue to work as efficiently as possible in effectively utilizing the resources entering our country," he noted.
Resilience amid global volatility
Garanti BBVA CEO Mahmut Akten stated that the sector exceeded its capital adequacy targets and pointed to the industry's stability during global turmoil.
"While the U.S. faced bank failures, Türkiye's banks demonstrated resilience, backed by a capital adequacy ratio well above international norms," he said.
Akten acknowledged the impact of COVID-19, geopolitical risks and inflation on profitability, noting that sector-wide earnings had dropped from $408 billion to $308 billion in recent years.
"There has been some erosion here. However, we are talking about a growing and strengthening sector," he noted.
"With a gradual decrease in interest rates, the banking sector will benefit from this, and we will continue to provide maximum support," said Akten.
Sustainability as imperative
For his part, Akbank CEO Kaan Gür described sustainability as a core mandate for the financial sector.
"By 2050, inaction on climate change could cost the global economy 60% of GDP," Gür warned, saying that failing to take necessary steps could result in nearly 1 billion ecological migrants, reduce maize and rice yields by 12% to 25%, lead to loss of biodiversity, and cause 600 cities worldwide to disappear.
He emphasized that sustainability is not a choice but a necessity for banks.
"Banks play a very active role in preventing risks. They place human and societal factors at the center of sustainability. Everything we do is to create value – not just economic, but also social and human value," Gür added.
Akbank, he says, has taken bold steps, joining the 2050 Net-Zero Banking Alliance and launching innovative projects like "Future in Transformation," one of Türkiye and Europe's largest upcycling projects that repurposes used office furniture into school desks and furniture.
"At the end of the project, we will provide over 18,000 new pieces of furniture produced through upcycling to more than 1,300 schools in the earthquake zone, benefiting nearly 400,000 students," Gür said, referring to Türkiye's southeastern region that was struck by devastating earthquakes in February 2023.