Kuwait Turk, established with the participation of some esteemed shareholders, such as the General Directorate of Foundations of the Republic of Turkey, the Kuwaiti State Social Security Institution and the Islamic Development Bank, started its banking and finance activities under the trade name “Kuveyt Turk Evkaf Finans Kurumu Anonim Sirketi” on March 31, 1989.
The major activity of the bank, whose trade name changed to “Kuveyt Turk Katilim Bankasi A.S.” in 2006, is to allocate the resources it obtains through both domestic and foreign “special current accounts” and “participation in the profit and loss calculations”, in addition to its equity capital, to the development of the economy, and to carry out all types of financial production activities and service offerings within the legislative framework. The bank conducts all its financial activities within the scope of the principles of “interest-free banking”. Additionally, Kuveyt Turk actually participates in the joint initiative associations established by the bank itself with the aim of encouraging investment initiatives on the part of natural and legal persons who carry out agricultural, industrial and commercial activities and of developing their business and operating activities. Thanks to these, the bank supports the national economy by providing resources to it both directly and indirectly.
The bank, which provides its services through a total number of 133 inland and foreign branch offices operating in the corporate and personal fields as of June 30, 2010, and through its branch office in Bahrain, financial services branch in Germany, and subsidiary in Dubai offering services abroad, has 2,687 employees as of June 30, 2010. Kuveyt Turk, whose capital had been TRY 500,000,000 in 2008, raised this amount to TRY 850,000,000 after the second quarter of 2010. The amount of the bank’s total assets rose to TRY 7.6 billion as of June 30, 2010. This rise corresponds to an increase of 11 percent on the figures for the previous year end. During the same period, the bank’s total deposit amount increased by more than 12 percent to TRY 6 billion and the total amount of its loans rose by 16.7 percent to TRY 5.5 billion. The bank’s net income for the period increased by 13.8 percent compared to the same period of the previous year, reaching TRY 94.7 million. Offering significant new insights into the banking sector through its senior management’s strong experience in banking and powerful leadership vision, and its dynamic and highly skilled personnel’s deep-rooted corporate experience, the young Kuveyt Turk is forging ahead with its activities abroad in its branch offices and agencies so as to maintain its position as the leading bank with the broadest international service network of all participation banks. Being supported by its strong capital structure and benefiting from Kuwait Finance House’s global relations and experience of interest-free banking, the bank attaches great importance to improving its services, which are in a leading position in international commercial activities conducted with the Gulf region through its branch office in Bahrain.
The basic objectives of Kuveyt Turk, which has designated “contributing to the development of the national economy” its primary objective, include having a stronger lead in foreign commercial activities and increasing access resources for Gulf investors and fund opportunities. The bank has capitalized on its advantage of being the first participation bank to have entered the personal banking sector and has maintained its leadership in this field thanks to its ability to develop new products. Kuveyt Turk is also one of the banks which offer their customers the widest range of products, and it has the largest housing portfolio. In addition, Kuveyt Turk is the first bank to have introduced customer base segmentation, as a consequence of which it is focused on offering high-quality services to its customers, establishing long-term relations with them and forming a loyal customer base. It also started the first “forward” application, which fixes the exchange rate in forward exchange transactions with the aim of protecting export and import firms from sudden rises and falls that may occur in exchange rates due to the uncertainties in the economy.
Kuveyt Turk aims to acquire profit share via “gold for gold” accounts for the first time in Turkey by offering gram-based gold purchase and sale opportunities at a record level. Having attained competitive strength in the face of big banks in the personal banking sector by cornering the gold and precious matters sectors, Kuveyt Turk, which cooperates with the Istanbul Gold Exchange in the fields of gold exports and imports in order to open physical gold accounts, also intends to cooperate with refineries abroad.
Kuveyt Turk, adding a new product and service to its existing range in participation banking, listed its gold exchange-traded fund GoldPlus for trading on the Istanbul Stock Exchange (ISE) in July 2010. Kuveyt Turk has therefore become the first participation bank in Turkey by founding an interest-free exchange-traded fund.
Moreover, Kuveyt Turk became the first bank in Turkey and Europe to issue Sukuk securities, interest-free bonds, led by Citigroup and the Liquidity Management House (LMH) in July 2010. Kuveyt Turk launched the three-year USD 100 million Sukuk paying a coupon rate of 5.25 percent and being rated BBB- by Fitch Ratings. The financing received one and a half times more demand than anticipated. During an event hosted by Kuveyt Turk in Istanbul, Turkey’s Finance Minister Mehmet Simsek said, “This is a turning point. As an alternative financial tool, Sukuk will make important contributions to the development of the country.”