Greek-Turkish economic relations can improve significantly and assist the general climate between the two neighboring countries, Ersin Ozince, president of the Turkish Bankers’ Association (TBB) and vice president and CEO of Turkiye Is Bankasi, suggested in his interview last week with Kathimerini. Ozince came to Athens last week for the International Banking Conference organized by the Institute of International Finance (IIF) and the Greek and Turkish banks’ associations. He talked to Kathimerini about the Turkish economy’s rapid progress, the banking system’s rebound after the 2001 crisis, and the prospects for Greek banks in Turkey. What is the general picture of the banking system in Turkey? Turkey’s banking sector is rather small compared to Greece, with its penetration in the economy (in areas) such as household and corporate credit at significantly lower levels than in this country, despite the size of the Turkish market. This, along with the demographics of Turkey, offers an immense scope for the development of Turkish banks. Further, the country is year-by-year gaining more stability both on political and economic level. Do not forget the Turkish banking system was hit by a serious crisis in 2001, when our bank association lost nearly half of its members: Before the crisis there were 80 banks operating while today there are just 48 left. This process, though, helped the most competitive, efficient and strong banks emerge. As a result, today’s banking system in Turkey is stronger and more mature. Developments in the last few years and the country’s European prospects create optimism about the sector’s growth in the coming years. What are Turkish banks’ strong and weak points? Many years of political and economic instability have now been replaced by a steady course, as the government is devoted to modernizing the economy and Turkey’s European convergence. The spectacular improvement of the country’s economy and the European course fill us with optimism and certainty about the banks’ growth potential. Inflation keeps falling and is now at the lowest point of the last 30 years. Growth rates of the gross domestic product reach 10 percent per year, the highest in the last few decades. The size of the Turkish market – 72 million people, most of them young – is another dynamic characteristic. All this makes me particularly optimistic about the banking system’s growth. In addition, the relationship with the EU is of utmost importance for us, and we believe it will develop further, expanding our prospects. As for our points of worry, I would mention the public debt, the interest rates’ level, the high taxation and the complexity of the legal system, which are points we need to focus our efforts on. We also worry about Turkey’s geographical location, surrounded by countries such as Iraq or those in the Caucasus that suffer from instability, terrorism and many other problems. Besides the Turkish market’s growth prospects, are you studying a possible expansion of activities into other countries in the region? Many Turkish banks have been investing and operating abroad for many decades. For instance the bank I am in charge of, Turkiye Is Bankasi, opened its first branches abroad in the 1930s in cities such as Alexandria and Hamburg. Most Turkish banks have branches or subsidiaries abroad, mainly in European countries where Turks live and work. As for the Balkans, I think Greek banks are much more active in the region. I am afraid there is no room left in the Balkans for new big moves. There may be some limited scope, but certainly the big opportunities are gone. Turkish banks must seek vital ground for their development in other regions, for example in Russia. What did you discuss with Greek bankers? Will the two associations cooperate? The two sides met (again this year) 12 years after their first meeting. This time we arranged our next meeting to be this autumn in Istanbul. In Athens the level and the organization of the conference were impressive, and the Hellenic Bank Association was very hospitable. We discussed general banking issues of the two countries, the developments in the international banking system and decided to cooperate exchanging know-how, information and experience, and of course to build good relations between us. Our aim is to examine the scope for joint action to the benefit of both associations and our countries. On behalf of the TBB I am particularly optimistic about the promotion of the economic and business ties of the two states, and I am certain this will assist the two nations in approaching each other further, as well as in their political relationship. Greek banks’ interest in the Turkish market has recently increased. Are political problems an obstacle for investment moves to materialize? Our countries definitely continue to have problems and differences. Still, in the last few years considerable steps have been taken for the rapprochement of Turkey and Greece, and we should focus on that. Younger generations have grown up without hostility, and society in Turkey has overcome past decades’ stereotypes, and so have politicians on both sides, as the Greek support for Turkey’s EU candidacy showed. No doubt entrepreneurship can decisively help the two countries convergence. Strengthening commercial relations, let alone Greek investments in Turkey or vice versa, will greatly contribute in improving our ties. Young people demand changes from us, and we have to work toward that. I am certain that if a Greek bank decides to expand its activities to the Turkish market it will not face any difficulties. Quite the opposite.