The Turkish banking industry accounts for a sizeable proportion of the economy. The assets of the sector have been, by far, the largest among all the financial institutions in the country. As of 2022, they occupied about two-thirds of the whole financial system. Additionally, the Central Bank of Turkey has grown its assets considerably over the past two decades, reaching a peak value of 191 billion U.S. dollars in 2022.
The banking industry continues to be the heart of economic activity in Turkey, with its ongoing growth, development, and adaptability to new trends and digitalization.
How efficient and stable is the Turkish banking industry?
The Turkish banking sector has faced some challenges and risks due to many factors, such as the Russia-Ukraine war, high inflation, lower domestic short-term interest rates, and high interest rates in foreign money markets. Consequently, the ratio of the asset size of the banking sector to gross domestic product (GDP) in Turkey followed a decreasing trend after the peak in 2021. On the other hand, the net operating profit of this industry marked a dramatic increase in 2022, having reached over 26 billion U.S. dollars. Additionally, the Turkish banking industry registered particularly high rates of return on equity (ROE) in 2022 and 2023.Digital banking is gaining momentum
Digital transformation has shown its impact on the banking sector in Turkey as well. Correspondingly, the number of digital banking customers continuously grew, marking a 281 percent of increase as of the last quarter of 2023 compared to the figures in 2017. In the past decade, there has been a growing trend toward mobile banking payments in the region, as it peaked at 605 billion Turkish lira in the fourth quarter of 2023. As digital banking has accelerated lately and fewer people visit bank branches since the COVID-19 pandemic, the number of physical bank branches has reduced each year. Between 2016 and 2023, almost 1,300 bank branches were shot down in Turkey.Leading banks in Turkey
As of 2022, there are 58 banks operating in Turkey, most of which are deposit banks. The three state-owned deposit banks, namely Ziraat Bankası, VakıfBank, and Halkbank, dominated the banking landscape based on the total assets. As of December 2023, Türkiye Cumhuriyeti Ziraat Bankası A.Ş. reported total assets worth over 129 billion U.S. dollars, which made it the largest bank in terms of assets. Nevertheless, there was a quite different trend when banks were ranked by ROE. In this case, mostly foreign-owned or Turkish private banks prevailed in the market. In 2022, Deutsche Bank A.Ş registered the highest ROE, at 59.4 percent, among all the banks in Turkey.The banking industry continues to be the heart of economic activity in Turkey, with its ongoing growth, development, and adaptability to new trends and digitalization.
