BCom was a pathfinder in the reform as HSBC, one of the UK's largest financial groups was allowed to become its biggest foreign shareholder holding no more 20% of its shares, the largest percentage allowed under Chinese law for foreign interests.
All subsequent initial public offers ("IPO") in Hong Kong by Chinese state commercial banks followed the model of the Chinese government allowing major foreign bank groups to hold a minority stake in the banks.
BCom's IPO was followed later in the same year by China Construction Bank, one of the big 4 state owned banks. 2006 was a watershed year for the major state owned banks.
Both the biggest (Industrial and Commercial Bank) and second largest (Bank of China) Chinese state owned banks successfully listed on both Hong Kong and Shanghai Stock exchanges. Industrial and Commercial Bank's listing had the distinction of being the largest global IPO in 2006.
The Agricultural Bank is the only remaining Chinese state owned commercial bank that remains to be restructured for IPO.
With the subsequent successful listing and the Chinese banks being well capitalised as a result, the following scenerios are being envisaged for the Chinese banking sector
- Intense competition across the sector as foreign banking groups are now allowed to conduct business in China as geographic and customer restrictions on RMB services were removed in December 2006.
- Consolidation of branches by the listed state owned banks, the number of branches have decreased rather than increased.
- An increasing emphasis to developing fee income as opposed to lending more loans such as wealth management products. To date, ICBC has the largest number of such wealth management centres of the 4 state owned banks.
- An increasing emphasis being placed on consumer finance such as developing consumer loans and credit cards to encourage domestic spending. China Merchants Bank and China Construction Bank are the two banks with the most number of credit and debit cards issued.
- Increased competition at the retail level as a number of foreign banking groups have expressed intention to incorporate locally in China to enter this business. To date, Citibank, Standard Chartered Bank, Hang Seng Bank, JP Morgan Chase has already been approved to incorporate locally.
- Innovation new products been introduced by the state owned banks to lessen reliance on making just plain loans such as treasury and trade financing products.
- The banking sector facing competition from insurance giants such as China Life and Ping An both setting up bank subsidiaries.
- State owned banks venturing overseas as China becomes a economic powerhouse and follows locally grown Chinese MNCs going overseas.
- Improved risk management processes of the banks as the Chinese government have stressed that the state owned banks must be operated on a commercial basis.
- Improved corporate governance of the state owned banks due to global pressures to improve shareholder returns.
In Turkey there are many sectors active and dynamic and the banking sector is one of them. The dynamism of the banking sector is a result of the lifting of certain restrictions that regulate it in the 1980s, as well as the liberalization of interest and foreign exchange and the entry of more foreign banks into the foray.
Around 80% of the country's gross domestic product (GDP) is contributed by the banking sector.
There are 51 banks in Turkey, both private and state, which are the ten biggest players in the country's banking industry? In no particular order, they are:
Akbank TAS
One of the most profitable banks of Turkey is Akbank TAS. Founded in 1948 and based in Istanbul, Akbank posted revenues of YTL2.525 million in 2007. Alone, it has 658 branches in Turkey which are managed by 13 regional directorates. The bank has a presence in Germany, in Malta and in the Netherlands. It works in close partnership with Citigroup.
Denizbank AS
In the past, Denizbank AS was once a state-owned bank that was established to support Turkey's maritime industries. In 1997 Zorlu Holdings has acquired Denizbank and under the umbrella of Zorlu Holdings, it became one of the largest banks in Turkey, with 244 local branches and an international presence. Dexia bought Denizbank from Zorlu Holdings in 2006, and it has a total asset of USD18.647 billion as of 2007.
Finansbank AS
A bank that is mostly owned by the Finansbank is one of the banks in Turkey that has the biggest network of branches locally and internationally. Finansbank has approximately 400 branches in Turkey and in many countries it has offices such as Ireland, Switzerland, Belgium, Romania, Bahrain, Russia, the Netherlands, Germany and France. Outside of Turkey, Finansbank is known as the Credit Europe Bank.
Oyak Bank
Oyak Bank started out as the Turkish branch of the First National Bank of Boston in 1984. Shareholders has changed variously in the time, it eventually became the Oyak Bank sometime in 1994. Later Oyak Bank later merged with Sumerbank, and in 2007 ING Group bought Oyakbank. Oyakbank is another one of the big banks in Turkey and owns assets up to USD2.2 billion and has branches all over the world in addition to the 300 local branches in Turkey.
Sekerbank TAS
Sekerbank was founded for a different service: being a cooperative bank for sugar beet growers in Turkey before becoming a fully commercialized bank. In the sugar industry Sekerbank is still active and has expanded its interests to tourism, trade and mining. The 500 branches of the bank extend all over Turkey and the bank has a representative office in Germany.
Turkiye Cumhuriyeti Ziraat Bankasi
Ziraat Bankasi literally means Agriculture Bank in Turkish. Ziraat Bankasi is one of the oldest banks in Turkey established in the territory that is now the country of Serbia when it was still part of the Ottoman Empire in 1863 and it is a state-owned bank that was established to protect the interest of farmers against usurers who charge high interest for loans.
Turkiye Finans Katilim Bankasi AS
In 2005 Anadolu Finans Kurumu AS of the Boydak Group and the Family Finans Kurumu AS of the Ulker Group has merged and Turkiye Finans is the result of this merger. Both the Boydak Group and the Ulker Group are leading industrial companies in Turkey.
Turkiye Garanti Bankasi
One of the largest privately owned banks in Turkey is Turkiye Garanti Bankasi, or simply Garanti Bank. In 2006, Its assets amount to around USD36 billion. Garanti Bankasi specializes in foreign trade and financing, and has a network of 428 domestic branches as well as offices in Luxembourg, Geneva, Malta, Northern Cyprus, Dusseldorf, London and Moscow. Dogus Group owns Garanti Bankasi with General electric.
Turkish Bank
The Turkish Bank is one of oldest bank in Turkey. It began as a ?savings box? in Nicosia, Cyprus at the turn of the 1900s before it became a full-fledged savings bank. In 1982, it first entered the banking sector of Turkey and soon became one of the most respected banks in Turkey.
Yapi Kredi Bankasi
The Yapi Kredi Bankasi is the one of the oldest private banks in Turkey. Before its merger with Kocbank AS in 2006, it was known as Yapi ve Kredi Bankasi AS and it was instrumental in the economic turnaround of Turkey in the early 2000s. In 2007, The Banker recognized the institution as the best bank in Turkey.
Both Wolfgang Jaegel & Cane Williams are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.