In June, ING Turkey’s general manager seat to Gökgöz Alper, Capital told the bank’s growth focus in the new era …
ALPER GÖKGÖZ, ING became the head of Turkey in June. Stating that they focus on leadership in digital, increasing savings and supporting exports in the upcoming period, the new general manager aims to increase both the share of free term deposits from 12 percent and the share of 5 percent in mortgage loans. “In the last 1-1.5 months, we see levels close to the beginning of the year in individual loan demands. On the legal side, with the revival of exports and the development of re-manufacturing, our customers have increasing demands. ”Gökgöz wants to grow on the manufacturing and export side regardless of scale.
From the October 2020 issue
ING ranks 12th in the sector of Turkey’s new general manager Alper Gökgöz, 3 main leg of today’s digital-led growth strategy, explains save as promoting and increasing exports. said that 80 percent of retail loans and savings deposits of 45 per cent came from non-branch channels Gökgöz, “Now, we have increased the target, Turkey, we act with vision to become the best digital agencies,” he says. On the savings side, he states that they plan to grow with the Orange Account, which has a 12 percent market share in free term products. In addition, the bank plans to grow in housing loans on the individual side. On the legal side, there is a goal of supporting Turkish exporters with Euro and TL loans. The bank expects to close this year with 7.5-8 percent growth in asset size and over 20 percent growth in loans. On the deposit side, a parallel picture to 2019 is expected this year, but there is a growth plan of over 10 percent in deposits again from 2021. Alpe sitting in the seat of ING Turkey’s headquarters in June Gökgöz, Capital told the bank’s growth focus in the new era:
What kind of changes have you made in the organization after you came to the management?
I have been working at ING Bank for eight years; I have been a member of the executive committee for the last 3 years. Therefore, I took an active role in the preparation and implementation of the bank’s current strategy. I also strongly believe in this strategy. Today, our growth strategy has three main points: Leadership in digital, increasing savings and supporting exports. ING Bank, one of the world’s leading institutions Umeda digitalization and we act with vision to become the best digital bank in Turkey. Today, 80 percent of our personal loans and 45 percent of our savings deposits come from non-branch channels. Now, we have increased the target, we act with vision to become Turkey’s best digital agencies. On the savings side, our Orange Account product, which we launched 8 years ago, is the leader in free-term products in its category with a 12 percent market share. We see in our results that many people started saving with the first Orange Account. Turkey’s deposit base is the most common bankasıyız. The sector ratio of deposits below 150 thousand TL in total deposits is 44 percent, whereas this rate is 62 percent in our country. We want to continue to grow on the savings side. We also supports exporters who export very important role for the development of Turkey. ING bank and a European origin, according to July data, 55 percent of Turkey’s exports are to European countries. We support Turkish exporters with Euro-based loans. Last year, Turkey Exporters Assembly (TIM) with more than 10 thousand troops to do the job we have provided 1.4 billion euros to finance exporters. We also support know-how.
Your bank grew 10.2 percent in loans in the first half. Where did the growth come from?
We grew in both corporate and retail banking in the first half of the year. We see that our growth in the commercial side is faster than in retail banking. During the pandemic period, especially in the second quarter of the year, we increased our size by 20 percent in all retail loan products with very favorable interest rates, compared to the same period of the previous year. In this process, we also made credit delays on the individual and corporate sides. On the deposit side, there was a different picture. Our customers also showed interest in alternative investment vehicles. Our mutual fund volume has nearly doubled compared to 2019. Our securities transaction volume reached 4 times in the first 8 months compared to last year.
Do you attribute this to keeping your deposit growth at 5.2 percent despite having a powerful product like Orange Account?
During this period, customers also showed interest in non-deposit investment instruments. Especially in the first quarter of this year, we saw that under the pillow gold and cash were on the rise. With the second quarter, deposit accounts and foreign currency time deposits began to replace under-pillow savings. We also see that our customers’ tendencies are in this direction. In this period, there was an interest in gold as well; we launched the Orange Gold account. We see serious interest in this new product. Turkey under the pillow is said to be 3-5 thousand tonnes of gold savings. We think that this account will be important to bring these savings to the economy. Recently, with the increase in TL interest rates, we see that customers’ interest in TL savings has increased and we have started to grow again in TL deposits.
How are the loan requests coming to your bank in the post-August period?
In the last 1-1.5 months, in which we are in the normalization process, we see levels close to the beginning of the year in personal loan demands. This is a good level. In the period when interest rates were low after June, the individual side increased a lot, but now we are going to good points at the beginning of the year. On the legal side, we see that our customers have demands with the revival of exports and the development of re-manufacturing. Although loan demands in corporate banking decreased slightly after the interest rate increased, we do not see a big difference compared to the period before August. Manufacturing and export are also very suitable areas for our growth strategy. We continue to support our customers around here. We continue to grow in corporate loans.
So are the credits returned to the investment for production on the legal side, too?
During the pandemic, shorter-term loans for working capital came to the fore. Now, with the re-normalization, we see that the interest in loans has increased in both manufacturing and exports in the last month. This makes us happy.
How is the distribution of your loans in the bank today? Are you aiming for a change here?
Today, one third of our loans in our bank come from retail banking and the remaining two thirds from corporate, commercial and SME banking. We do not foresee any change in the distribution in the upcoming period. In corporate banking, our assertion is high in exports. We want to grow with TL and Euro loans that support the export side in corporate bodies. We have a desire to grow in mortgage loans in the individual as well.
Is there a segment such as SME or commercial that you want to grow especially on the corporate side?
For us, the field in which the customer operates is important, and it is important to make an industry for manufacturing and export. We focus on small, medium or large companies working in these areas. In addition, we support the Turkish foreign companies in corporate banking operations and take an active role in both commercial and corporate banking operations in multinational companies of Turkey.
How much loan delay did you make during the pandemic process? Are requests for postponement going on?
We have met the postponement requests of approximately 90 thousand people on the individual side and one thousand companies on the legal side. We postponed the loan of 1.5 billion TL in total. The demands for postponement are still coming, albeit at a reduced rate. We continue to meet them as well. Deferred loans on the individual side account for 7 percent of total retail loans. Here again, if our customers demand, we continue our work to postpone it until 2021, and we also have customers who request.
So how are the loan payments going on the corporate side? Is there any problem?
The credit quality of the bank is quite high. We see that the payments have started and are continuing smoothly. In the sector, the data are not clear, so I cannot comment on behalf of the sector.
How will you end this year with growth? What growth will you have for 2021?
Our strategy for this year and 2021 is certain, and where we will grow is determined. We are planning to finish this year in the growth band of 7.5-8 percent in asset size. Our loan volume will grow by more than 20 percent. On the deposit side, we foresee a parallel to the end of last year. The reason for this is the increasing interest in non-deposit products. We have a growth plan of over 10 percent in deposits from 2021. In the coming period, we plan to grow on the corporate side, especially in loans that support export and production. We expect the trend that started in manufacturing and exports in the last 4 months of the year to continue and gain more momentum on the legal side. On the individual side, we have a 5 percent market share among private banks in housing loans; It is among our goals to further enlarge this. We anticipate that there will be a rebound in housing loans later this year. In addition, we think that floating rate housing loans will be used more, as in developed countries. Digital banking will be our main vehicle in all our products and services.
At the end of 2015, the share of ING Bank in asset size in the sector was 2.2 percent and its share in loans was 2.4 percent. Five years later, your share in assets and loans has halved in the middle of this year. Why is that?
This question comes to me. Obviously, we focus on leadership in the fields we choose. Leadership in the three priorities we have identified as leadership in digital, increasing savings and supporting exports are important to us. We want to grow in the priority areas we choose as we see the opportunity. We are the leader in market share in the category we want in savings. Our share in exports is increasing, we intend to increase it even more. We have a 5 percent share in housing loans, and we want to increase this as well.
“GROWTH IN CREDIT WILL CONTINUE”
HOW TO TABLE?The sector continues to grow in TL loans. We see that the growth continues mostly on the corporate side. There has been a decrease in foreign currency loans for a period; There is still a downward trend here, although not very fast. With the normalization in the sector, we see that the interest rates have reached new levels. The weighted average interest rate increased from 7.5 to 10.5. This had repercussions on loan prices and deposits. We slowly see them in the sector’s balance sheets. However, 2021 will be a period when these will settle even more, and we will continue to grow with our customers in the new world after COVID-19.
WHAT DO THE FORECAST SAY? According to BRSA data, the asset size of the sector was 19.3 percent in June 2020 compared to the end of 2019; In July, it increased by 25.1 percent. The asset size of the sector was 5.6 trillion TL. We expect this figure to exceed 6 trillion TL at the end of the year. Again, we expect the loans, which were 3.3 trillion TL in July, to exceed 3.6 trillion TL by the end of the year. We expect the deposits to complete the year at the level of TL 3.5 trillion. The continuation of the trend the sector has shown so far will enable it to start 2021 with strong and high morale.
“NO RETURN TO BRANCHES”
DECREASED 75-80 PERCENTBefore the pandemic, we were working for customers to make transactions through digital channels, and year on year our operational transactions were decreasing by 30-50 percent. Of course, this accelerated after the pandemic. During the pandemic period, the number of customers going to the branch decreased by 75-80 percent and this trend continues in July-August. Branches will of course continue, what needs to be done is traditional banking, that is to make these branches a part of the transformation.
THE CONCEPT WILL CHANGE We make this possible with our innovative branch concept. In our branches, where we have adopted this concept, there are special rooms where our customers can perform all their banking transactions on mobile, we also provide internet service for our customers who do not use mobile banking and offer special financial consultancy service. Currently, about 20 percent of our branches are new concept branches, and we will continue to increase this rate.