Thursday, March 31, 2011
ISTANBUL - Hürriyet Daily News
 Ersin Özince, 58, the embodiment of Turkish banking for many, has announced he is also leaving his job as the chairman of the Turkish Banks Association. AA photo |
The general manager of Turkish lender İşbank has announced his resignation just two days after reacting to a provocative statement from the Turkish state minister for the economy.
Ersin Özince, 58, the embodiment of Turkish banking for many people, has announced he is also leaving his job as the chairman of the Turkish Banks Association.
Özince’s statement Thursday came after an exchange of tense words with State Minister Ali Babacan, who earlier this week said the government "does not wish to take police-type measures" against banks that do not limit loan growth. Özince replied Tuesday, saying: “What does he mean by this? I suppose it is about [police] coming and taking us [bankers], like we see in the press. What kind of police-type measures could be imposed against a bank? Isn't this a state of law?"
The words, which were a thinly veiled protest of the recent and controversial arrest of two prominent journalists, appeared to be the main reason behind Thursday’s resignation.
At a press conference Thursday, Özince went even further; when a reporter asked whether government pressure on journalists had moved to bankers, he said, “Yes,” without hesitation.
“Even though I personally appreciate Minister Babacan, if one insists on using words like ‘police measures,’ things in our subconscious come to the surface,” said Özince, who had been an İşbank employee and executive for more than three decades.
“All the managers of Turkish banks agreed with my comments, even the managers of state-owned banks,” Özince told the Hürriyet Daily News & Economic Review.
“How I could explain it better? They are clear enough,” he said, when asked whether he could amplify his previous statements.
There were still 18 months until Özince’s scheduled retirement, but he “wanted to resign just before the bank’s shareholders meeting,” an İşbank executive told the Daily News on condition of anonymity. “He might serve in different positions at İşbank after April.”
Huge loss in profits
Turkish banking might lose nearly $2.6 billion in revenue this year as a result of the Turkish Central Bank’s policy to hike reserve requirements, according to Özince’s calculations. He said İşbank might also be forced to pay less in dividends to shareholders from last year’s profits.
“The reserve requirement hike has been an indirect tax for us, as there is no interest paid for these reserves,” said the top banker.
Due to an extra tax applied on the opening of new branches, İşbank’s income might fall by 300 million Turkish Liras this year, he added.
On March 23, the Central Bank raised reserve requirements for lira deposits of one month or less to 15 percent from as low as 10 percent. The measures, which accompany an unusual policy of low interest rates, are expected to drain nearly 20 billion liras of liquidity from the system.
Speaking on the record-high current account deficit, Özince said: “I do not think the deficit can be reduced with a shrinking in consumer loans. A pill could heal a health problem, but it also could show side effects.” A possible decline in loan growth would also hurt the real economy deeply, he added.
Commenting on the 9.2 percent annual growth in the fourth quarter, Özince said Turkey’s growth figures should be compared with emerging markets, not with the European Union.
Ersin Özince, 58, the embodiment of Turkish banking for many people, has announced he is also leaving his job as the chairman of the Turkish Banks Association.
Özince’s statement Thursday came after an exchange of tense words with State Minister Ali Babacan, who earlier this week said the government "does not wish to take police-type measures" against banks that do not limit loan growth. Özince replied Tuesday, saying: “What does he mean by this? I suppose it is about [police] coming and taking us [bankers], like we see in the press. What kind of police-type measures could be imposed against a bank? Isn't this a state of law?"
The words, which were a thinly veiled protest of the recent and controversial arrest of two prominent journalists, appeared to be the main reason behind Thursday’s resignation.
At a press conference Thursday, Özince went even further; when a reporter asked whether government pressure on journalists had moved to bankers, he said, “Yes,” without hesitation.
“Even though I personally appreciate Minister Babacan, if one insists on using words like ‘police measures,’ things in our subconscious come to the surface,” said Özince, who had been an İşbank employee and executive for more than three decades.
“All the managers of Turkish banks agreed with my comments, even the managers of state-owned banks,” Özince told the Hürriyet Daily News & Economic Review.
“How I could explain it better? They are clear enough,” he said, when asked whether he could amplify his previous statements.
There were still 18 months until Özince’s scheduled retirement, but he “wanted to resign just before the bank’s shareholders meeting,” an İşbank executive told the Daily News on condition of anonymity. “He might serve in different positions at İşbank after April.”
Huge loss in profits
Turkish banking might lose nearly $2.6 billion in revenue this year as a result of the Turkish Central Bank’s policy to hike reserve requirements, according to Özince’s calculations. He said İşbank might also be forced to pay less in dividends to shareholders from last year’s profits.
“The reserve requirement hike has been an indirect tax for us, as there is no interest paid for these reserves,” said the top banker.
Due to an extra tax applied on the opening of new branches, İşbank’s income might fall by 300 million Turkish Liras this year, he added.
On March 23, the Central Bank raised reserve requirements for lira deposits of one month or less to 15 percent from as low as 10 percent. The measures, which accompany an unusual policy of low interest rates, are expected to drain nearly 20 billion liras of liquidity from the system.
Speaking on the record-high current account deficit, Özince said: “I do not think the deficit can be reduced with a shrinking in consumer loans. A pill could heal a health problem, but it also could show side effects.” A possible decline in loan growth would also hurt the real economy deeply, he added.
Commenting on the 9.2 percent annual growth in the fourth quarter, Özince said Turkey’s growth figures should be compared with emerging markets, not with the European Union.
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