Albaraka, a domestic participation bank, will grow 20 percent this year and intends to open 17 more branches in Turkey by year’s end and neighboring countries despite a shrink in the sector, according to bank officials.
The bank’s growth plan depends on expanding in Turkey and abroad with methods particular to participation banks, said Fahrettin Yahşi, general manager of the lender. (source)
“Our target for 2011 was a 16 percent growth in return on equity,” Yahşi said, “We expect to reach our target, achieving a growth at around 20 percent. Still, we will stay below the 25 percent of the loan limit [in ratio to deposits], as the government puts it.”
The plans come despite an overall shrink in the sector due to recent measures by the Central Bank to control the country’s credit growth.
Albaraka would protect its profits by offering funds out of its own deposits. “We provide resourced funds for our customers,” Yahşi said.
Albaraka’s growth plan includes opening new branches in Turkey and its neighbors. The target countries are Albania and Bosnia and Herzegovina, while the work on a branch in Iraq’s Arbil is about to finish, the general manager said. “We are also in talks to buy a lender in Albania, the majority shares of which are owned by the Islamic Development Bank.”
The bank aims to open 17 branches in Turkey by the end of this year, increasing the sum to 125.
New Albaraka credit card
The lender has recently signed a deal with World Card, a regular credit card managed by Yapı Kredi Bank, the general manager said. They will test the new implementation beginning in August before the card is offered to Albaraka customers in September, he said. They added the new card “due to a demand from our customers for sales in installments,” he said.
The bank currently has 50,000 credit card users. Yahşi said their goal was to increase this figure to 400,000 with the World Card. The bank’s AlbarakTürk Classic card is a system that works with no interests.
