1 THE 4th TURKISH-ARAB ECONOMIC FORUM GLOBALIZATION TO REGIONAL COOPERATION WALID R. ALAMEDDINE CHAIRMAN Lebanon’s Banking Control Commission June 11-12, Istanbul

2 TURKISH-ARAB ECONOMIC RELATIONSHIPS - Overall Relationships - Trade - Capital Markets - Banks

3 OVERALL RELATIONSHIPS (Excluding Trade & Finance) - Real Estate Investments - Turkish Contractors - Tourism - Media – “Turkish Series” - Central Asian Republics, Turkey as Gateway: Azerbaijan, Uzbekistan, Turkmenistan, Kazakhstan, Kyrgyzstan, Tajikistan ($ 1Trillion combined economy by 2015)

4 G Brazil U.S Mexico124.3Japan2 1.2S.Korea132.81Germany Turkey142.14U.K Indonesia152.05France Australia161.79Italy Saudi Arabia Canada Argentina186.99China S. Africa India E.U Russia10 GDP 2007 $ Trillion 85% of World GDP 48.7/57.3 IMF/PPP

5 TURKEY’S CAPITAL MARKETS: (a) Stock Market, & (b) Bonds & Bills Market ­ More than 60% of “free float market capitalization” on Istanbul Stock exchange (ISE) is foreign. ­ Foreign Investor’s capital gains are tax-exempt ­ Free Repatriation of capital and proceeds ­ Size is still smaller than banks, as banks have relatively significant interest rates

6 a) STOCK MARKET ­ 317 companies listed ­ Market Capitalization: 120 BN ­ Trading Value: 260 BN ­ Daily trading value: above $ 1BN ­ 22 companies more than $ 1BN (Market Capital) ­ Financials: 51% of total ­ 1/3 of net FDI’s (Foreign Direct Investments) came through the ISE ( ) through the ISE ( ) ­ FDI’s around $ 15 BN annually ( )

7 (b) BONDS & BILLS MARKET - Active & much larger in traded value than stock exchange exchange ­ Trading value: $ 3,019 BN (2008)

8 TURKEY’S TRADE 2008 Exports:$ Billion Imports:$ Billion Trade Balance: (-) 53.1 Billion

9 TURKISH-ARAB TRADE ­ 2008 witnessed the fastest Growth of Turkish exports to the Middle East Middle East ­ The largest increase was with the UAE (also Qatar & Kuwait) ­ Europe still accounts for more than 50% of Turkish Exports Exports

10 Turkey’s Trade: Partners Share of Total EXPORTS %OECD % Middle East % UAE * %Iraq % Saudi Arabia %Qatar * Exports to UAE show readjustment in 2009 from the very high rate of 2008

11 Turkey’s Trade: Partners Share of Total IMPORTS %OECD % Middle East %Iraq %Iran % Saudi Arabia Saudi Arabia took over from Iraq as the main Oil supplier to Turkey following the closure of the pipeline in August 1990

* NAME 3,0928,6673,711U.A.E.1 2,9265,5243,927 SAUDI ARABIA LEBANON**3 * Annualized - as of ** Turkey ranks as the 7 th exporter to Lebanon TURKISH – ARAB TRADE SELECTED FINANCIAL VALUES $ Millions

13 TURKEY’S BANKING SYSTEM - Independent Regulator: Banking Regulation & Supervision Agency (BRSA) BDDK Supervision Agency (BRSA) BDDK - Total Banks’ Assets $ 481 Bn - Banks Assets / GDP: 77% - Number of Banks: 50 - Representative Offices of Foreign Banks: 50

14 $ MILLIONS NAME 68.6 ZIRAAT (State) I S GARANTI3 56.3AKBANK YAPI VE KREDI 5 TURKISH BANKS: LARGE “REGIONAL” SIZE Asset Size

15 Major Shareholders Name NCB (65%) Turkiye Finance* 1 Kuwait Finance House (62%) Kuveyt Turk* 2 Al-Baraka Banking Group (54%) Albaraka Turk* 3 Bank Med (41% - Management) Arab Bank (50%) Turkland Bank % Libyan Foreign Bank 1.6% Kuwait Investment Arap Turk 5 * Participation (Islamic) Banks Majority-Owned Arab Banks in Turkey: 5/50 Banks