Pioneer Participation Bank Kuveyt Türk explained second phase of Export Support Package which actualized in January on the purpose of supporting export and increasing the foreign currency input. The bank that decreased the profit rates at Euro and USD, presents proper rate and term choices by analizing the needs of exporting customers. Kuveyt Türk which applies 36 months payment term with no payment in first 6 months, has profit rates of 0,26% at Euro and 0,35% at USD.
The active size of Participation Banking reached to 207 bilion TL By 29% rise. This moved the level of share taken from banking, from 4,9% to 5,3%. Kuveyt Türk General Manager Ufuk Uyan who specified that new products would increase the share of participation banking in forthcoming period, mentiones that the activation of Central Advisory Board would fasten the product studyings.
Kuveyt Türk steps foward between other banks ,at the investments to technology . The Bank carried the innovative products and services to over seas by the technology company Architect. The Bank exporting BOA Banking Platform which is developed at R&D center, at the same time focuses on open source code banking, cloud informatics, artificial intelligence, chatbox and confidential biometric solutions . Beside digital investments, Kuveyt Türk continues to branching at the places near it’s target. The goal of bank which has 418 branches is to reach 450 branches. In this manner, Kuveyt Türk General Manager Ufuk Uyan answered our questions.
How is 2019 year passing for the bank?
I can say that fund collecting is especially positive. We provided 35% fund rise as Kuveyt Türk. In the first three months of this year, we raised the funds that we collected, to 64 bilion TL with 18% rise . At the end of the year we have target for reaching to 85 bilion TL active size. At the first quarter our active size is closed to 84 bilion TL. According to exchange rate movements, we are going to meet the target altough this level changes. We have profit goal at the amount of 1 bilion TL up to end of the year. In the first three months, we gained 254 bilion TL net profit with 25% rise according to the same term at last year. We are going yo reach our target on profit. The problem is about credit raise , fund usage… Even though we are between the banks which increase credit investment , in the first quarter the fund usage rise is 6%. Last year at the same period , the raise was at the rate of 10%. As it is recalled, Central Bank put limit for foreign exchange loan extension and those decisions affected to the banks. The foreign exchange loan extensions started to decrease. We start up a campaign by publishing Export Support Package at the begining of 2019. We presented the opportunity of 36 months payment term without any payment at first 6 months to exporters . This campaign reached to the capacity at 400 milion USD. Now we are working on short term payment packages to support the exporters.
Do you have new product studies directed to different sectors?
We concentrated on especially tourism and agriculture alongside textile, construction, food and chemistry. We are under this rate for fund usage. We created a significant portfolio at the sukuk exports on Euro , USD basis. There is a significant rise in active security portfolio at statement dated 30 March 2019. On the other side, we are involved in financing of mega projects. At the financing of 1915 Çanakkale Bridge Project , we provide 200 milion Euro funding with our main finaciers. We fell into financing of Ankara-Niğde highway with 100 milion Euro. Once again we decided to join with 200 milion USD for South Marmara Highway financing. Thereby we provide support to finances of public projects.
We know that Kuveyt Türk gave importance to technology investment . How does it affect to branching politics?
We are going on branching near digital investments. We have been opening digital branches called XTM for aproximately 5-6 years. The number of XTM digital banking branches which customers could do bank operations alone or directly over call center by video chat, arrived to 35. This year we plan to open 15 new XTM and phisical branches . Abroad, we have one branch in Bahrain, four branches of KT Bank AG, in Germany. We will soon open the fifth branch in Munih / Germany. We will continue branching at places where is closed to our strategic target. Now we have 418 branches, our target is to arrive to 450 branches.
You have started to export you technology investments…
We answer the purpose of our bank’s technologic need by the software called BOA , that we developed. We started software export through our company ,Architect . Also we served to public participation banks newly founded. Architect reached to the software export volume, worth 120 milion USD . We exported software to main financier of Kuveyt Türk. Until the end of the year, we will adapt our programme to their common network in Middle East. We are a bank which gives importance to technology. We have Digital participation banking platform called ‘Your Bank’ alongside our mobile branch and XTM. In this platform targeting to the young people, banking operations such as account opening, can be carried out without the bank branch. We are the only bank which has two R& D centers located in Konya and Şekerpınar.
Do you foresee that your customer profile would consist of young people by those investments?
Our customers are average 40 years old, our target for fortcoming period, is to effect to the youth. We establihed digital participation banking platform ‘Your Bank’ through this aim. The bank preferance starts when young. We see this as a mission. In this manner, we are proceeding decoding and robotic education programme called ‘1010 Explorer’ in cooperation with Kızılay (Red Crescent in Turkey) and with the aprrovel of ministry of national education. We provide robotic and decoding education at several cities of Turkey. Our employees give those educations. We don’t see that as one day education. We give education equipments and computers as a gift to every school visited. Our plan is to provide this education to 1010 students every year.
You are active on gold banking…
We are the bank that takes the first step about gold banking and I can say that in time we converted to a gold bank. Because we completed a significant integration . We are involved in many area such as from import to export, from gold raffination to make fund and carry it to the situation of collecting deposit Money. Lastly we became a member of Shanghai Gold Exchange. Also we are already a member of London Gold Exchange. Our aim about gold banking, is to gain gold sources to economics and a serious source is already collected. We are in top three in Gold Exchange activities. Scrap gold that we collected is over 15000 tons . Every year we collect 2-2,5 tons gold, and this issue make a big contribution to economy. Now our total gold fund achieved 26-27 tons.
What do you see as the most important problem in sector?
The convantional banking experince is over 100 years and participation banking experince is over 30 years. Developing new products and satisfaction of customer needs are very important for participation banks. Because satisfaction of customer needs will expand the sector. Product studies speed up by going into action of Central Advisory Board which is established under TKBB. Generally the participation banking’s problems are credit growth and how to achieve troubled debts. It is an abnormal period and there is a rebalancing. Banking sector passed to a new standart called TFRS 9 in 2018. It is necessary to review to that standart on accounting of non-performing loans ratios.
Do you observe an increase on non-performing loans at the end of the year?
Especially the concordatum effected non-performing loans seriously. Our non performing loan ratio is about 3%. We are one of the lowest 4 banks. In the sector non-performing loan ratio is closing by 5%. BDDK explained that this ratio might increase to 6%. Besides there are restractured Group 2 credits. This doesn’t mean non-paying credits. The company is going on it’s activities, it might be effected when country fact sheets decsreased. However we can say that non-performings loans are under control. On the other hand, those numbers are rising up because there is no credit growth. I think that if credits start to increase at the second half of the year, those ratios arrive to the positive points.
What are your expectations about growth and exhange?
We advise to our customers not to get risk on exchange. We work with zero position as bank. We extend fund in terms of USD, Euro and gold. There will be rebalancing in exchange with the decrease in the inflation and increase of tourism income. We are expacting the growth to be at the ratio of 1% or 2%. We foresee that we can achieve growth ratio in the new economic programme.
Also you have special banking activities….
We have special banking services to customers who have savings at the amount of 2 milion TL and over. One of the areas that we have activities, is foreign banking. We provide fund flow from outside by important sources we collected. We have agency in Gulf. There is a source flow because of especially citizenship at individual sight. We procure 24% of foreign funds we collected, from foreign banking. We have also such an important contribution to economy.
Where is Kuveyt Türk in the activities of main financiers?
Turkey has 30-40% share ,however it differs according to exchange effect, between the countries where our main shareholder KFH operates.Our main group is affected when Turkey’s sovereign rating. Because Turkey is an important asset and has an important contribution on profit.