Who We Are

 

Türk Eximbank is a fully state-owned bank acting as the Turkish government’s major export incentive instrument in Turkey’s sustainable export strategy. As Turkey’s official export credit agency, Türk Eximbank has been mandated to support foreign trade and Turkish contractors/investors operating overseas.

 

Türk Eximbank’s main objectives are promoting Turkey’s exports through diversification of exported goods and services by increasing the share of Turkish exporters in international trade, finding new markets for traditional and non-traditional export goods and providing exporters and overseas contractors with support to increase their competitiveness and to ensure a risk-free environment in international markets. As a means of aiding export development, Türk Eximbank offers specialized financial services through a variety of credit, insurance and guarantee programs.

 

Most developed countries have an export credit agency (ECA) like Türk Eximbank to promote exports. An export financing system should in theory represent a joint effort between official ECAs on the one side, offering insurance and guarantee programs to facilitate exports (in preference to direct credits), and commercial banks on the other side, responsible for financing export operations. This is the way export finance is achieved in many developed countries. Türk Eximbank is different, in that it is one of the few ECAs in the world, which engages in direct lending activities as well as implementing insurance and guarantee schemes within the same institution.

 

Relations with the State

 

As a 100% state owned-bank, acting as the Government’s major export incentive vehicle in Turkey’s export drive, Türk Eximbank maintains close co-operation with the related entities of the Government. Türk Eximbank’s policies and operations have been formulated to work within the framework of the export-led growth strategies pursued by all Turkish governments since 1980. Türk Eximbank acts within the framework of Five-Year Development Plans and Annual Programs. Development Plans set strategies regarding foreign trade, industrial development and foreign relations in addition to other economic and social policies. Representatives from Türk Eximbank participate actively in the preparatory stage of these plans and exert an influence on foreign trade policies.

 

Türk Eximbank regularly presents its annual programs to the Supreme Advisory and Credit Guidance Committee chaired by the State Minister in charge of the Bank’s activities. This committee fixes upper limits of credits to be extended by Türk Eximbank, guarantees to be issued and insurance transactions to be effected, either as a total amount or by country, sector and program-wise.

 

The Committee meets at least once a year and the Board of Directors of Türk Eximbank is obliged to observe the limits it has set. The Committee also includes as members:

 

Ø       Undersecretary of the State Planning Organisation

 

Ø       Undersecretary of the Treasury

 

Ø       Undersecretary of Foreign Trade

 

Ø       Undersecretary of the Ministry of Industry and Commerce

 

Ø       Undersecretary of the Ministry of Finance

 

Ø       Governor of the Central Bank of the Republic of Turkey

 

The Chairman and Deputy Chairman of the Board of Directors and the Chief Executive Officer (CEO) of the Bank are also members of the Committee.

 

Losses incurred by Türk Eximbank in its credit, insurance and guarantee transactions as a result of political risks are covered by Turkish Treasury.

 

Resources

 

Türk Eximbank’s main sources of funds are direct funding from the Treasury through capital increases and transfers from extra-budgetary funds as well as through borrowing from commercial banks and international financial markets.

 

The Turkish Treasury makes capital contributions to Türk Eximbank as the sole shareholder of the Bank. These contributions are used to support Türk Eximbank’s activities and to maintain the Bank’s capital adequacy.

 

The nominal capital of Türk Eximbank is YTL 1 billion and fully paid as of July 31, 2007. Along with the contributions to paid-in capital, the Turkish Treasury provides additional funds to the Bank from designated funds. If requested, the Turkish Treasury supports Türk Eximbank in its funding efforts by guaranteeing the Bank’s borrowings abroad.

 

Corporate Strategy

 

As Turkey’s official export credit agency, Türk Eximbank has been mandated to support foreign trade and Turkish contractors/investors operating overseas through various credit, guarantee and insurance programs. Providing financial support for Turkish exporters under the same terms and conditions enjoyed by their competitors abroad has become vital not only for creating new markets for Turkish exporters but also for sustaining their shares in traditional markets. It is from this base that Türk Eximbank strategies have been formulated.

 

Türk Eximbank’s main objectives are to increase the competitiveness of Turkish exporters and contractors working abroad and to create opportunities for them in new markets, especially in the Central and Western Asian Republics, the Russian Federation, Eastern Europe and African countries, in addition to neighbouring countries.

 

Since 1980, an export-led growth strategy has been adopted by the State and successive governments have formulated their annual programs within the framework of this state policy. Türk Eximbank has a crucial and expanding role in the implementation of this strategy and its operations reflect Turkish government policies. The strategy of Türk Eximbank is set in its annual programs and is formulated in accordance with current Turkish economic policies.

 

Emphasis on Non-Cash programs and Longer Term Schemes…

 

To date Türk Eximbank has inevitably concentrated on short-term trade financing. Working capital loans provided to small and medium scale exporters as well as to foreign trade companies have taken a significant share. However, in the long-run, Türk Eximbank intends to place more emphasis to guarantee and insurance programs and medium and long-term trade and project finance, while leaving short-term trade financing to Turkish commercial banking system. Türk Eximbank believes that in the long-run overseas construction and investment will play an important role in increasing the foreign exchange earnings of Turkey.

 

Channelling of Commercial Bank Resources…

 

A proportion of Türk Eximbank’s funds arise from borrowings from commercial banks and Türk Eximbank is able to indirectly channel part of the Turkish commercial banks’ reserves to export financing. Discount programs is another tool used to achieve this aim. In addition, in offering guarantee schemes to commercial banks, Türk Eximbank is creating a risk free environment for the banking sector to encourage them to engage directly in export financing.

 

Increased Focus on Small and Medium Scale Enterprises…

 

Türk Eximbank aims to increase the focus of its programs on helping small and medium scale enterprises (SMSEs). Such enterprises play an important role in the Government’s strategy, particularly since the establishment of the Customs Union with the EU. SMSEs usually experience difficulties in passing the rigid qualification tests for loans, even if they are fully capable of complying with the terms of their export contracts. Türk Eximbank, therefore, has placed special importance on SMSEs in its strategy.

 

Focus on International Co-operation…

 

Türk Eximbank seeks to improve international relations with other export credit agencies and international financial institutions. Türk Eximbank also explores all opportunities to co-operate with foreign institutions on the financing of joint venture projects involving Turkish and foreign partners in third countries.

 

While forming strategies of the Bank and implementing them, Türk Eximbank is committed to conforming with the internationally accepted rules and regulations set by the WTO, the OECD Consensus, the EU and the Berne Union. Moreover, the main elements of the Bank’s medium and long-term strategy are formulated to comply with the eventual full incorporation of Turkey in the EU.

 

Sound Financial Structure…

 

Profit is not the first aim of Türk Eximbank, but while expanding its business volume Türk Eximbank tries to sustain a sound financial structure. In this context, Türk Eximbank believes that it is very important to implement effective strategies and procedures to control credit risk, liquidity risk, and asset/liability risk.



Last saved: September 12, 2007

 

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