ICBC Turkey - Company of the Year - Banking

Company: ICBC Turkey
Company Description: ICBC Turkey Bank AS provides banking and financial services. It offers banking services to corporate, commercial, small and medium enterprise and individual clients, as well as provides fund management transactions, such as foreign currency, money market, and securities trading. The company was founded on April 29, 1986 and is headquartered in Istanbul, Turkey.
Nomination Category: Company / Organization Categories
Nomination Sub Category: Company of the Year - Banking - Medium-size

Nomination Title: ICBC Turkey

What did it take for a foreign bank to capture the lion’s share of asset growth andrank 9th among 32 local banksduring the pandemic?

The Turkishsubsidiaryof the world’s largest bank, Industrial andCommercialBank of China, did just that.

HISTORY – PAST PERFORMANCE

Turkey began her journey of integrating into global financial markets around the time ICBC launched in China.At that time,Turkish residents were allowed to open foreign currency accounts in banks, increasing product variety and services. This process culminated in the opening up of capital accounts in 1989, further facilitating international trade in goods and financial services.

ICBC acquired Turkey’s TekstilBankasi A.S.in 2015 and joined the ranks of the few foreign banks to open its doors for corporate, retail, commercial and individual banking services in Turkey.

Not insignificantly, China’s position as a major producer of products and goods at competitive prices surfaced export opportunities throughout the world, including Turkey.Plus, no foreign bank had a leadership position in carving the gateway between Turkey and Asia.

With its mission of ‘profitability, performance, prestige,’ ICBC’s assets increased by 17.22% in 2019 just before the pandemic took off.

ACHIEVEMENTS

The global pandemic had a major impact on China and Turkey.The Turkish economy spiraled:

-16% inflation
-20% depreciation of the Turkish lira
-Tourism evaporated
-Exports decreased
-Gold imports increased
-Foreign direct investment declined
-The Turkish banking sector suffered45% fall in net profits

Deeply in debt in 2019-2020, ICBC faced its own challenges:
-Huge increase in liabilities
-Decline in profit reserves
-Withdrawal of Fitch ratings
-Weak core capitalization

The bank’s exposure to the troubled energy sector, which comprised 25% of gross loans and obligations of FC holding 24 of the bank’s largest loans (75% of gross loans) were a source of consternation.

Blessed by the backing of its parent bank to address the impact of the pandemic on the Turkish economy and the Turkish banking sector,ICBC still was able to service its obligations.

To boost revenue or save money, ICBC launched innovative services on the consumer and corporate side, which also served to boost its reputation:

-Operational funding for Turkish Airlines at the new Istanbul Airport
-Retail auto lending
-WeChatPayapplication – enabling Chinese tourists to make payment transactions with WeChat Pay – thus stimulating tourism to Turkey
-ICBC Global Matchmaking Platform Turkey - to boost trade between Turkey and China

Through thick and thin during the past four years, ICBC Turkey has achieved a 48.4% profit growth annually, versus 14.5% for the Turkish banking sector.

ICBC achieved Turkish banking sector’s highest rate in loan and profit growth, furthersetting it apart from its Turkish bank competitors.

SIGNIFICANCE/UNIQUENESS OF ACHIEVEMENTS

Today, resulting from hard work and investment, ICBC Turkey has transformed into a regional financial powerhouse from a local boutique bank with:

-39 branches around Turkey
-Fully owned subsidiaries:ICBC Turkey Securities and ICBC Turkey Portfolio management providing investment banking and fund management services
-26.6 billion Turkish lira in consolidated assets as of March 2021
-36% asset growth in 2020 and 6% in the first quarter of 2021,beating the sector average

ICBC recently topped three authoritative rankings, securing its position as:

-first among the “Top 1000 World Banks" by the Banker Magazine
-first of Forbes “Global 2000"
-first among Fortune commercial banks

ICBC Turkey’s successes have been featured in major business publications:

-Capital Magazine (15,000 circulation) - GM interviews/features February 2020, October 2020, January 2021
-Fortune Magazine (13,118 circulation) – chairman on cover/feature October 2020, Cashless and New Economy special edition January 2021, Chinese Companies in Turkey and the Modern Silk Road, cover/feature April 2021.
-Businessweek Magazine (9,000 circulation) - January 2021 Assistant GM interview
-Economist Magazine (11,914 circulation) - Chairman interviews/features March 2021

Today, largely thanks to ICBC’s role in Turkish banking,

-China has become Turkey's third-largest trade partner and second-largest importing country
-Turkey’s position as a key market for foreign investment of Chinese public contracting companies has increased massively

DOCUMENTATION

-Key Results:Illustrates the bank's financial performance and success despite economic hardship and global pandemic
-Business Week Interview translation: Details straight from a top executive in a major business publication
-WeChatPaypresentation: Shows how this Chinese bank innovated a payment system that can also be used in Turkey, facilitating tourism to Turkey
-Local and International Awards:Proof of recognition by the internatıonal and local banking sectors