islamic finance country report - turkey

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  • Strategic Partner

    A Joint Initiative of

    A MeMber of


    and the Promise

    oF Growth

    turkeyislamiC FinanCe

    rePort 2014:

  • Your gateway to Islamic markets and investmentsA revolution in the way you access information on Islamic Finance is now here, all in one place.

    Zawya Islamic makes Shariah-compliant investments, decision making and networking with the Islamic markets easier with access to:

    Fatawa, Standards, Regulations, Legal Documentation and Product Guidance Notes intelligently connected with scholars and instruments

    Global Sukuk, Islamic Funds, and Shariah-compliant Equities

    Islamic Finance News, Research, Money Markets, Indices, & Benchmark Rates

    The Islamic Finance Development Indicator and Islamic Finance Gateway Community

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  • We are the leading source of intelligent information for the worlds businesses and professionals, providing customers with competitive advantage. Intelligent information is a unique synthesis of human intel-ligence, industry expertise and innovative technology that provides decision-makers with the knowledge to act, enabling them to make bet-ter decisions faster. We deliver this must-have insight to the financial and risk, legal, tax and accounting, intellectual property and science and media markets, powered by the worlds most trusted news organization.

    KNOWLEDGE SOLUTIONS POWERING DECISION MAKINGThomson Reuters is an integrated knowledge services provider that assists the Islamic Finance industry through providing solutions that enhance transparency, clarity and accessibility of Islamic Finance to the global audience of businesses and professionals. We are proud to have been at the heart of Islamic banking since the first commercial Islamic bank was launched in 1975.

    Our knowledge solutions help you gain clarity and transparency in the rapidly emerging Islamic finance industry by providing you with data services, research products and consulting services.


    DATA SERVICESThomson Reuters Eikon and Zawya products provide access to a full spectrum of all relevant Islamic asset classes and content sets to give us-ers the best of class research capabilities.

    RESEARCHBuilt on the back of the worlds most extensive data capabilities, Thomson Reuters leverages its global network to provide primary source in-telligence on markets, industries and institutions relevant to Islamic finance.

    CONSULTINGThomson Reuters can provide bespoke service harnessing our global knowledge network com-bined with our deep expertise in Islamic finance.

    ISLAMIC FINANCE GATEWAY COMMUNITYIslamic Finance Gateway (IFG) Community is the one dedicated knowledge Gateway for profes-sionals from across different countries to converge and interact on industry issues that matter in order to generate actionable outcomes to shape and speed up the industrys growth.

    To join the

    Connect with Us:

    FOR MORE INFORMATION ABOUT THE COMMUNITY REACH US[email protected] RESEARCH AND CONSULTING:[email protected] SALES AND MARKETING:[email protected] ALL OTHER ENQUIRES:[email protected] [email protected]: [email protected]: [email protected]: [email protected]/ThomsonReutersIslamicFinanceGateway

  • The Islamic Research and Training Institute (IRTI), a member of the Islamic Development Bank Group (IDBG), was established in 1401H (1981). The principal aim of IRTI is to undertake research, training and advisory activities in Islamic Economics and Islamic Finance to facilitate the economic, financial and banking activities in IDB member countries to conform to Shariah. A knowledge-based organization, IRTI, is considered to be one of the pioneers and key centers of excellence around the world in promoting and supporting the development and sustenance of a dynamic and comprehensive Islamic Financial Services Industry (IFSI), which supports the socio-economic development of IDB member countries and Muslim com-munities across the globe.

    Vision TobetheglobalknowledgecenterforIslamicEconomicsandFinanceby1440H(2020)

    Mission Toinspireanddelivercuttingedgeresearch,capacitybuilding,advisoryandinformationservicesintheareaofIslamicEconomics andFinance

    Islamic Research and Training Institute | P.O. Box 9201, Jeddah 21413, Kingdom of Saudi Arabia | Tel: +966-12-636-1400

    Fax: +966-12-637-8927 or +966-12-636-6871 | | Email: [email protected]

    IRTI SeRvIceSAdvIsoryAndConsulTAnCyIrTIprovidescomprehensiveadvisoryandconsultancyservicesinthefieldsofIslamicFinanceandEconomicswithglobaloutreachtothepublicandprivatesectors.Backedbyoverthreedecadesofindustryexperience,IrTIsadvisoryandconsultancyservicesaddrealvaluetotheclientsbusinesses.InadditiontoIrTIsrenownedexperts,IrTIutilizesindustryexperts,affiliatepartnersandIdBGroupmembersentitiesexpertstoprovideadvisoryandconsultancyservicestoclients.IrTIsconsultancyservicesinclude(butnotlimitedto):settingupregulatoryframework,developingnewIslamicfinancialproductsandservicestocatertothemarketneeds,shariahresearch,shariahtoolkits,shariahguidelines,introductionofIslamic





    A MeMber of

    About the IslAmIc ReseARch And tRAInIng InstItute

    President of Islamic Development Bank (IDB) Group Ahmed Muhamed Ali speaks during the Third IDB 1440H Vision Commission Meeting in Kuala Lumpur March 23, 2006. REUTERS/Zainal Abd Halim

  • table oF Contents

    Foreword & MeSSAge FroM PArtner 6

    eXCLUSIVe to tHIS rePort 11

    teAM oF ContrIbUtorS 16

    ACKnowLedgeMentS 17

    StUdY PUrPoSe, SCoPe & APProACH 19

    CoUntrY bACKgroUnd 23

    MACro-eConoMIC enVIronMent 27 A. Macro-economic Fundamentals 28 b. FdI and Investment trends 34 C. Socio-economic Health 36 d. trade trends and opportunity Sectors 38 e. general business environment 41

    FInAnCIAL MArKet LAndSCAPe & trendS 43 A. Customer Profile 43 b. Financial Landscape 45 C. regulatory and Supervisory Framework 61

    ISLAMIC FInAnCe deMAnd & PotentIAL 69 A. Islamic Finance development 70 b. retail Survey Findings & Insights 100 C. Islamic Finance Market Potential/demand 113 d. turkish Sharia ecosystem 115 e. Microfinance environment overview 116

    ISLAMIC FInAnCe InVeStMent SCenArIoS 119 A. Islamic Finance Sector Investment Considerations & Key Challenges 119 b. Zakat and Awqaf Institutions 123 C. Strategic roadmap for Islamic Finance Industry development 124

    APPendIX 127 A. retail Survey Methodology & respondent Profile 127 b. Industry Stakeholders Interviewed 133 C. Selected Items on balance Sheet and Information 142

    endnoteS 144

    Turkey Country Report 5

  • messaGeFrom Partner

    I believe that the turkey Islamic Finance report 2014 by thomson reuters, IrtI and CIbAFI is a noteworthy resource for our fast-developing industry. As you are well aware, Islamic banking is displaying an annual growth of over 17 percent globally. Islamic banking asset size is projecting a volume of more than $1.8 trillion by the end of 2013. Participation banking has achieved an enormous leap forward in turkey in recent years. while banking industry assets grew an average of 19 percent annually, participation banks displayed a 32 percent average between 2005 and 2012.

    trkiye Finans leads the industry with innovative products as a pioneer with a successful record as the most profit-able participation bank for the last two years in turkey. our figures from the first half of the year are an indication of this. Funds issued by our bank swelled 20.2 percent to 15.7 billion turkish Lira by June 2013, up from 13.1 billion turkish Lira at 2012 year-end. the non-cash loan portfolio volume reached 7.4 billion turkish Lira as of June 2013. Collected funds of the bank soared to 13.3 billion turkish Lira, a 17 percent boost, whereas the average increase in the industry remained at 8.5 percent in the first half of this year.

    the sukuk that we issued for $500 million

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