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Turkey’s largest privately owned bank to expand to UK and EU

By Pramod Kumar
Işbank Turkey bank Hakan Aran Reuters/Dilara Senkaya
Işbank CEO Hakan Aran wants his bank become a regional fintech hub
  • Işbank explores acquisitions and partnerships
  • Lender wants to become fintech hub
  • CEO predicts interest rate cut

Işbank, the largest private bank by assets in Turkey, is exploring potential acquisitions and partnerships in digital banking and payment systems in the United Kingdom and European Union, a news report said.

The move is part of the bank’s aims to become a regional fintech hub, backed by the recent merger of its subsidiary Moka Payment Institution with Birleşik Ödeme Hizmetleri, Işbank’s CEO, Hakan Aran told Reuters.

No other details were given.

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Işbank is working to increase the contributions to its income from payments infrastructure, digital and service banking.

Aran said: “Currently, 90 percent of income comes from traditional banking and 10 percent from such new platforms.” He said he expected the ratio to narrow in the next five years.

Işbank’s CEO expects the Turkish central bank to start easing monetary policy in November with a 250-basis point interest rate cut.

The interest rate is forecast to fall to 45 percent by the end of 2024 and 25 percent by the end of 2025, Aran said.

This month Turkey’s central bank held interest rates steady at 50 percent for a fifth consecutive month, despite continuing inflationary risks.

Aran said the Turkish banking sector would continue to face challenging conditions throughout 2025.

The last 500 basis-point rise to the benchmark rate was announced in March after a deteriorating inflation outlook. The rate has been increased by 4,150 basis points since June 2023, to try to put a brake on inflation and stimulate economic growth.

“We all will continue to pay the price for the sake of ensuring price stability and lowering inflation,” Aran said.

He predicted that inflation would drop to almost 42 percent by the end of the year and to 20 percent in the following year.

The central bank has set its inflation forecasts for 2024 and 2025 at 38 percent and 14 percent, respectively, and expects inflation to fall to 9 percent by the end of 2026. 

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