Total Assets: TRL 54.2 billion ($40.46 billion) (2005)
Stock Exchanges: Turkey
Ticker Symbol: AKBNK
NAIC: 522110 Commercial Banking
Akbank TAS is one of Turkey's top two publicly held banking groups. The bank operates more than 600 branches throughout Turkey, as well as nearly 1,500 ATM machines. The company is also a member of the Golden Point ATM, extending its ATM services to more than 6,500 machines in the country. Since the early 2000s, Akbank, originally founded as a financial vehicle for the growing businesses of the Haci Omer Sabanci Holdings Group, has pursued a strategy of redeveloping itself as a truly full service bank. As part of that effort, the bank has added a new range of services, including pension funds, private banking, and assets management. In addition to its operations in Turkey, Akbank operates seven branch offices in Germany, one in Malta, and a subsidiary in the Netherlands. The bank also controls 65 percent of Sabanci Bank in London. In 2005, Akbank's total assets topped TRL 54.2 billion ($40.46 billion). The bank is listed on the Istanbul stock exchange. The Sabanci family directly controls 24.55 percent of the bank, and another 41.5 percent through the Haci Omer Sabanci Holdings conglomerate. Erol Sabanci serves as Akbank's managing director and chairman of the board.
FROM RAGS TO BANKER
Haci Omer Sabanci was born in Akçakaya, in Turkey's Kayseri region, in 1906. Sabanci's family was poor—his father died when he was only five—and at the age of 14, Sabanci set off on foot, walking 450 kilometers to find work in the Adana cotton fields. Before he turned 20, Sabanci had already begun to sharecrop his own parcel of land in the Adana region. Sabanci saved his money, which he invested in a cotton gin.
This investment provided the base for Sabanci's financial empire. Sabanci bought into a vegetable oil factory, later known as Yagsa, in 1943, and by the late 1940s had put together Toroslar Trading Company, which later became known as Marsa. The vegetable oils and margarine business later became one of the pillars of the Sabanci family conglomerate.
Sabanci's rising fortunes encouraged him to enter the financial markets as well. In 1948, Sabanci led a group of shareholders from the Adana and Kayseri regions in the creation of a bank, called Akbank after Sabanci's home village. Haci Sabanci and family remained Akbank's majority shareholder. From its base in Adana, Akbank grew quickly. By 1950, the bank had already begun to make equity investments elsewhere, starting with the Industrial Development Bank of Turkey. These investments helped Akbank emerge as a regional leader.
Akbank also began to build a branch network in the 1950s. The company's first branch was opened in Istanbul in 1950. That city became the growing company's headquarters in 1954. Less than a decade later, Akbank had already opened more than 100 branches. Akbank's success convinced the Sabanci family to deepen its financial interests, and in 1960 the family entered the insurance market, launching Aksigorta AS. That company initially operated as a subsidiary of Akbank, before being spun off as an independent business.
Akbank had also taken its first step into the international banking market. In 1964, the company opened a representative office in Frankfurt, Germany, serving the growing population of Turkish "guest workers" in Germany. The Frankfurt office served as a transfer point for workers sending their wages back to their families in Turkey.
The Sabanci empire in the meantime had grown considerably. Sabanci remained heavily involved in Turkey's cotton industry, buying up his own cotton farm in 1949, then extending this activity with the creation of a new cotton ginning mill, called Bossa. By 1951, Bossa had expanded to include the production of textiles as well. At the same time, Sabanci entered the real estate development market, leading the development of the Erciyes Palas complex in Adana, and then the construction market. The Sabanci family's holdings continued to grow strongly after Haci Omer Sabanci's death in 1966. By the early 1970s, the family-held conglomerate, now known as Haci Omer Sabanci Holdings and led by Sabanci's five sons, had become major producers and distributors of plastics products, cement, aluminum, buses and other vehicles, and automotive parts, including the Lassa tire company founded in 1974.
The Sabanci group was already one of Turkey's leading corporations by the early 1980s. As such, the holding company attracted the interest of a number of international companies seeking entry into the Turkish market. This enabled the Sabanci group to launch a series of partnerships, deepening its penetration of Turkey's industrial and financial markets. At the same time, Sabanci began building up its own international operations, such as the launch of the trading companies Exsa Handels, in Germany, Universal Trading in London, and Holsa in New York.
In support of this growth, Sabanci expanded its banking presence onto the international market as well. In 1981, the company opened an office in London. By 1983, this office had become a full-fledged bank. Originally known as Ak International Bank, the bank's name was later changed to Sabanci Bank. The bank, which operated as an Akbank subsidiary, was the first private sector Turkish bank to be established outside of Turkey. The company also continued to follow the development of the guest working community in Germany, opening representative offices in Hamburg, Essen, Hannover, Stuttgart, and Munich by the mid-1990s.
Akbank's status as a leading player in the Turkish banking sector was confirmed in 1985 when the company formed a joint venture with Banque Nationale de Paris, founding a new bank in Turkey, BNP-Ak Bank. The new bank was initially held at 51 percent by Akbank and 49 percent by BNP. In 1988, however, the partners broadened their ownership circle, bringing in a new partner, Germany's Dresdner Bank. The joint venture's name was then changed to BNP-Ak-Dresdner Bank.
Akbank's vision is to be the leading multi-specialist bank in Turkey. Akbank's mission is to contribute to the development of the Turkish economy and the Turkish financial system by providing high-quality, specialized banking products and services that are innovative and comprehensive.
Akbank's success reflected the success of the larger Sabanci conglomerate, which had continued to develop partnerships, such as the foundation of the Brisa tire joint venture with Bridgestone, and expanding its range of interests to include tobacco, hotel ownership and management, automobile manufacturing, dairy products, and even electricity generation. By the mid-1990s, the Sabanci family's holdings had long topped the $1 billion mark, and the conglomerate had become Turkey's largest privately owned business. Many of the companies within the Sabanci empire had gone public; by the mid-2000s, the holding company controlled some 13 public companies, including Akbank. Haci Omer Sabanci itself went public in 1997, in part as a means of moving family members out of key management positions.
TURKISH BANKING LEADER
Akbank continued to extend its branch office network in Turkey, and by the mid-2000s operated more than 600 branch offices. The company also rolled out ATM services, building up its own network of nearly 1,500 ATMs throughout the country. In 1994, Akbank was one of the driving forces behind the creation of the "Golden Point" ATM network, which shared ATM services among member banks. In this way, Akbank was able to extend its ATM services to more than 4,500 locations in Turkey, giving the company an 11 percent share of the total ATM market. Akbank also launched its own credit cards. In 1996, the bank's position as a leader in the Turkish market was further underscored when it acquired the exclusive franchise for American Express cards in the country in 1996.
Akbank expanded its international network further in the late 1990s. In 1998, the bank converted its Frankfurt office into a full-fledged branch. The success of that effort encouraged the bank to extend its branch network to its other offices in Germany. These were converted to branches in 1999. In that year, the company crossed another, albeit virtual, frontier, when it launched its own internet banking services. This was followed by the creation of a new banking vehicle, the Commercial Internet Branch, in 2000, which catered to the SME market. Also in 2000, Akbank created two new dedicated financial services subsidiaries, Ak Portfolio Management, and the Private Banking Unit. This move came as part of the company's effort to transform itself into a full-service bank for its next growth phase. As part of this change in group strategy, Akbank launched a vast branch restructuring program in 2002, earmarking an investment of some $350 million.
Akbank added to its international operations again in 2000, opening a branch office on the island of Malta. This was followed by the opening of a new branch office in Berlin in 2001, and the creation of a subsidiary in the Netherlands, Akbank International NV, to serve the large community of Turkish immigrants there. Back at home, the company extended its internet banking service to include a separate English-language site, in order to serve the large international community in Turkey as well. The company then acquired majority control of Akhayat Insurance, which it transformed into a pension fund called Ak Pension Fund, at the beginning of 2003, in a bid to take the leading share of Turkey's private pension fund market. In that year, also, Akbank launched a new credit card, the MasterCard-backed Axess, which became one of Europe's fastest-growing credit cards.
- Haci Omer Sabanci founds Akbank in partnership with shareholders from Adana and Kayseri regions in order to provide financing for the development of Sabanci's other business interests.
- Akbank makes first equity investment, in the Industrial Development Bank of Turkey, and opens branch office in Istanbul.
- Akbank moves its headquarters to Istanbul.
- Company opens representative office in Frankfurt, Germany, to serve Turkish "guest worker" population there.
- Company founds Ak International Bank (later Sabanci Bank) in London, becoming first privately held international Turkish bank.
- Company founds BNP-Ak bank joint venture with BNP of France.
- Dresdner bank joins BNP-Ak-Dresdner Bank joint venture.
- Akbank becomes founding member of Golden Point ATM network in Turkey.
- Akbank gains exclusive franchise for American Express card in Turkey.
- Frankfurt office is converted to a branch office.
- Company converts offices in Hamburg, Essen, Hannover, Stuttgart, and Munich to branch offices; launches internet banking services.
- Akbank founds Ak Portfolio Management, the Private Banking Unit, and the Commercial Internet Branch in strategy to become full-service bank; opens branch office in Malta.
- Akbank forms subsidiary in the Netherlands, Akbank International NV; acquires Akhayat Insurance.
- Akbank launches $350 million branch restructuring program.
- Company converts Akhayat Insurance to Ak Pension Fund.
- Akbank increases holding in Sabanci bank to 65 percent; acquires full control of BNP-Ak-Dresdner joint venture.
As it continued restructuring its branch network, Akbank also moved to take tighter control of other areas. The bank boosted its direct shareholding in London's Sabanci Bank, from 37 percent to 65 percent in April 2005. By then, the company had also acquired full control of the BNP-Ak-Dresdner Bank joint venture.
By the mid-2000s, Akbank had clearly taken its place among Turkey's top four banks, boasting total assets of more than TRL 54 billion ($40 billion) to place it second among the country's publicly listed banks into 2006. Founded to provide the financial backing for the expansion of the Sabanci family's network of companies, Akbank had grown into a full-fledged international banking leader as one of Turkey's top lenders. Nonetheless, the bank remained intimately connected with the Sabanci family, which continued to hold more than 70 percent of Akbank's share both directly and through Haci Omer Sabanci Holding. Akbank looked forward to future growth as a Turkish banking leader.
Ak Asset Management (99.99%); Ak Emeklilik Private Pension Fund (73.41%); Ak Investment Fund (45.72%); Ak Securities (Ak Yatirim) Brokerage (99.80%); Akbank N.V.; AkLease (99.98%); BNP-AK-Dresdner Bank (39.99%); Sabanci Bank (65%); Turkiye Sinai Kalkinma Bankasi Development Bank (6.45%).
Turkiye Cumhuriyet Merkez Bankasi A.S.; Citibank Turkiye A.S.; Turkiye Cumhuriyeti Ziraat Bankasi; Akbank TAS; Turkiye Is Bankasi A.S.; Turkiye Garanti Bankasi A.S.; Yapi ve Kredi Bankasi A.S.; Turkiye Halk Bankasi A.S.; Turkiye Vakiflar Bankasi TAO; Finansbank A.S.; Kocbank A.S.
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Kurtul, Zafer, "Akbank: See the Difference," Banker, September 2002, p. 112.
Norton, Guy, "Market Parched After Supply Dries Up," Euroweek, May 2, 2003, p. S5.
"Right on Track," FDI Magazine, February 5, 2004.
Timewell, Stephen, "Clean up Boosts Investors' Trust," Banker, February 1, 2004.