Introduction

Abstract

Recently, the Turkish banking sector has become a promising target for foreign investors. Throughout the 1990s and early 2000s, with only a minuscule 3 per cent of total banking sector assets controlled by foreigners, Turkey was one of the few primary emerging markets unable to attract foreign investment. But this trend has now changed dramatically. Between 2004 and 2006 foreign banks — some of them world-leading financial institutions such as Citigroup, UniCredito, BNP Paribas and Fortis — have invested around USD 14 billion, mainly through acquiring majority shares in locally established medium-sized banks, to gain a presence in the Turkish banking market. As of 2006, the level of foreign ownership with a controlling share constituted a third of the total banking sector assets in Turkey.