Turkish Banking VS German Banking

In this article, I compared the German banking sector with the Turkish banking sector. Germany is the country with the strongest economy among the European Union countries. Turkey is the biggest candidate country wishing to join the European Union for decades. Moreover, Germany has the highest trade volume with Turkey among the European Union countries. Therefore, comparing the banking sectors of these countries can give us an idea about their economies. And maybe it will be a guide about new opportunities that may arise in the future. Let see the GDP and per capital income of these countries.

GDP and per capital income

Germany and Turkey's GDP development by years is as follow;

As of 2019, Germany's GDP has reached to amount of 3.8 Trillion Dollars while the same year Turkey's GDP has reached to amount of USD 760 Billion,

The per capita income development of these two countries over the years is as follows.

In 2019 Germany has USD 48,500 dollars per capital income, while Turkey's has USD 9,700.per capital income

Number of Banks

Numbers of banks of these countries as follow;

There are 54 banks operating in Turkish Banking sector as;

• 34 deposit banks,
• 14 Development and Investment banks,
• 6 participation banks

The German banking system is made up of almost 1,800 banks, which include;

• 200 private banks,
• 400 publicly-owned savings banks (Landesbanks),
• 1.100 member-owned credit unions. 

Turkish banks assets&liabilities structure

As June 2020 total amount of assets of Turkish Bankas are 5.3 Trilyon TRL(683 Billion EURO, avr. EURO/TRL:7,84). The composition of assets and liabilities items of Turkish Banks is as follow;

As seen in the table, the major items of assets are loans and securities. It means, Turkish banks grant most of its assets as loans to domestic sector and buy public securities(mostly tresaury bonds). On the liabilities side, the major items of liabilities are; deposits(Households, public etc..), due to banks(mostly syndicated loans), equites and securities issued.

German Banks assets&liabilities structure

Total assets of Germans Banks is EURO 8,755 Billion as end of 2019. As shown below; private households, domestic, foreign banks, non-financial companies and foreign non-banks consist major items of assets. In other words, German banks has granted app. 30% of their assets( 2.626 Billion EURO) as a loan to the foreign banks and foreign non-bank institutions in 2019.

As can be seen in the table, German banks have granted significant part of their assets abroad. On the other hand, Syndication loans borrowed by Turkish banks from foreign banks amount to app.65 Billion Euro as of June 2020. It is clear that this amount can be improved in favor of Turkish banks when compared with the loan amounts given by German banks abroad.

Conclusion;

• German banks lend 30% of their assets to foreign banks and institutions.
• 14% of Turkish Banks liabilities consist of foreign banks loans(mostly syndication loans).
• Germany has the highest trade volume with Turkey among the European Countries.
• Turkey and Turkish banks are profitable and reliable country for German Banks. Thus, German banks can use this as an opportunity to lend more money.(especially in large infrastructure projects)
• Turkish banks should collaborate with German banks to get a higher share from the loans granted by German banks.