Jan. 8, 2020

İkram Göktaş


İkram Göktaş

CEO, Vakıf Participation Bank (Vakıf Katılım)

“We are also the biggest public bank doing the most transactions on the Istanbul Gold Exchange. We are the leader by far in this and are constantly among the top three banks.”


İkram Göktaş has been the CEO and a board member of Vakıf Participation Bank since 2015. Prior to joining Vakıf, he worked as a deputy general director at Türkiye Finans Participation Bank and in various positions at Anadolu Finance Institution and Garanti Bank. Göktaş graduated from Ankara University's political sciences faculty business administration department.

How does Vakıf Katılım differentiate itself in a competitive banking sector?
We are the only public bank in Turkey that does gold banking. We rank third among 854 institutions active in this market over a period of three years. Therefore, gold banking is our niche. We should consider its different advantages as well, in terms of reserves and such. In gold, the usage area is limited on the credit side. However, we are also the biggest public bank doing the most transactions on the Istanbul Gold Exchange. We are the leader by far in this and are constantly among the top three banks. We carried out gold exports amounting to USD425 million in this period. We do imports as well. We work as a gold correspondent. Gold will make up an important part of our strategies for the coming period. We are thinking about what we can do differently regarding gold banking right now.

What is Vakıf Katılım's strategy to hedge against the increasing number of non-performing loans (NPL) in the market?
We have not been affected as much by NPLs as other banks. We may have chosen our clients well, but our clients are still a part of this economy, so they were impacted. The sector's biggest problem has been companies declaring bankruptcy. Most that did so regretted it, because if they had sat down with banks and talked about it, they would have found refinancing solutions, especially public banks that can provide solution-oriented approaches. NPL rates increased, though they are currently on a level of 4-5%, which is manageable. Even though we acted drastically, this rate came to 2% for us. The Banking Regulation and Supervision Agency (BDDK), the Central Bank, and the Capital Markets Board (SPK) as well as independent audit companies have all created a structure to deal with NPLs. There is an increase in NPLs across the country, though Turkey's strong banking structure can handle this. Everything is returning to normal currently.

From which sectors of the economy have you seen the most demand for sharia-compliant financing?
We do not have such a sector distinction; however, we do pay attention to this. We are a public bank, and we seek to support the sectors working in parallel with the government's new economic plan. All our products and services are Islamic, though we do not support a sector specifically. There are four important areas for us: companies that export, companies that support employment, companies that provide import substitution, and the manufacturing sector. We provide them special prices and payment terms because these are beneficial for a sustainable economy, and one of Turkey's biggest problems is its current account deficit.

Participation banks in Turkey want to capture around 15% of the banking sector's assets by 2025. From a regulatory and banking strategy standpoint, what steps need to be taken to reach that goal?
In the last 10 years, especially in the participation-banking sector, many important arrangements have been made. However, there have also been challenges. When Bank Asya was in the sector, it had a market share of 35%. After it went defunct, new participation banks opened up immediately to fill the gap. However, that market share has been filled by foreign and conventional banks; participation banks only filled a small portion of that 35%. Still, many new entrants and participation banks have broken the 5% barrier in market share, which is a magic number for us and will improve in the future; it is currently 6%. The role of a public bank is important here. The authorities are helping us overcome our biggest disadvantage, which is a lack of financial products. This is one of the most important problems in comparison to conventional banking, especially for products sold at a personal level. With new legislation and regulations, we will increase our penetration.