Turkey is one of the fastest growing markets for Islamic banking outside of the GCC region

Growth is expected to continue into despite a depreciating currency and political challenges at home and in neighbouring Syria

[Ankara], Turkey,  4 November, 2013:  Thomson Reuters, the world's leading source of intelligent information for businesses and professionals, released an Islamic Finance Country Report on Turkey today in collaboration with the Islamic Research and Training Institute (IRTI), a member of the Islamic Development Bank and the General Council for Islamic Banks and Financial Institutions (CIBAFI), in partnership with Turkiye Finans Katilim Bankasi and with the support of Al Baraka Banking Group.

The report, which is based on a national retail financial services perception survey and interviews with key influencers in the financial industry, offers a comprehensive and systematic approach to identifying and measuring the opportunities for Islamic finance in the country.   The physical report will be available at the Global Islamic Economy Summit 2013 held in Dubai on the 25th-26th November 2013.

Key findings include:

  • There is a significant opportunity for participation banks to more than double their share of the total banking sector to as much as 13.5% by 2017 from the current 5.1%

  • Participation banks' assets are growing 25% annually, twice as much as non-participation banks

  • 38% of non-participation bank consumers would consider using a participation bank

  • There is still significant need to educate Turkish consumers - over 80% of non-participation finance customers and 40% of participation finance customers said they had little to no understanding of Islamic finance concepts

  • Turkish participation banks have had greater success than non-participation banks in finding profitable places to deploy the new capital while remaining well capitalized.  Participation banks' average capital ratio is 13.7% compared with non-participation banks' 17.4%

Russell Haworth, Managing Director, Middle East and North Africa, Thomson Reuters, said: "Turkey has ambitions of being a key regional Islamic financial centre.  The Turkey Islamic Finance Report 2014 highlights important characteristics and demonstrates the breadth of opportunity that lies within the Global Islamic Economy. We are proud to launch this important analytical report in collaboration with the IRTI and CIBAFI and look forward to further collaborations in the future."

Dr. Mohamad Azmi Omar, Director General of IRTI said:  "Turkey is one of the most dynamic economies of the 57-member Organization of Islamic Cooperation (OIC).  The findings of this report clearly indicate that this emerging country offers international investors a wide range of attractive opportunities in the Participatory Financial Services Industry. As Turkey advances towards its goal of becoming one of the world's top 10 economies, its Participatory Financial Services Industry has the potential to become one of the most dynamic in the region".

The report also reveals the significant lack of understanding of participation banking in Turkey. It underlines the need to enhance knowledge about the industry and alter the negative perceptions associated with participation banking as an important prerequisite to the growth that is being planned for the next ten years.  

Dr. Sayd Farook, Global Head of Islamic Capital Markets, Thomson Reuters, said: "Based on the report, we anticipate great demand for Islamic retail banking but its ability to realize this potential depends on how well the industry addresses the needs of the population. There is little knowledge of Islamic finance among retail consumers, which can be a dangerous thing. Lack of information can lead neutral consumers to be opposed to Islamic finance, as they are unable to distinguish between Islamic and conventional products. The industry needs to develop a coherent strategy to increase knowledge about the Islamic finance value proposition, utilizing training, research, marketing, branding and awareness campaigns across multiple platforms. Addressing this issue is key if Islamic finance is to achieve its growth potential in Turkey."

Dr. Farook added, "The scope of opportunity for Islamic banks and other Sharia-complaint sectors in Turkey is another proof point for the global nature of the broader Islamic Economy.   Thomson Reuters will continue to devote research and analysis capability to support the transparency and therefore public understanding of this critical global economic sector."

Mohamed Ben Youssef, Executive Director and Acting Secretary General of CIBAFI said: "We believe that the findings of the report will whet international investors' appetite for Turkey's Islamic finance sector. The onus is now on Turkey's market players to methodically expand and deepen the Islamic finance sector's ecosystem in order to build a meaningful and sustainable industry."

To download the full version of Turkey Islamic Finance Report 2014: Fundamentals and the Promise of Growth, please visit the link below.

www.zawya.com/middle-east/landinglead/turkey/  

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CONTACT
Tarek Fleihan
PR Manager, Middle East, Africa & Russia / CIS
+97144536527
tarek.fleihan@thomsonreuters.com

© Press Release 2013