February 25, 2013 / 3:20 PM / 5 years ago

Turkish banks deny cartel involvement in rate-setting probe

* Competition Board begins two days of hearings with banks

* A dozen lenders accused of collusion on rates

* Total fine seen up to $2 bln, more likely far less

* Banking Association urges leniency

By Orhan Coskun

ANKARA, Feb 25 (Reuters) - Some of Turkey’s biggest banks denied being involved in a cartel as a series of hearings got underway on Monday in an anti-trust case which officials said could lead to fines of up to $2 billion on the sector.

Kicking off the sessions, Akbank Chief Executive Hakan Binbasgil told a committee of Turkey’s Competition Board the bank had not been involved in anti-competitive behaviour.

“Akbank has always respected the law. We are not involved in a cartel,” Binbasgil told the committee.

The head of the local unit of global bank HSBC took a similar line.

“HSBC Turkey is not guilty. HSBC Turkey was never involved in a gentlemen’s agreement or in a fixing of interest rates and commissions,” said Martin Spurling, HSBC Turkey’s chief executive.

The Board was due to hear defence arguments from a dozen banks accused of collusion in setting loan rates. Having opened its probe into complaints of anti-competitive behaviour by the banks in November 2011, the Board will hear defence until Tuesday evening, with a final verdict due within 15 days.

Last August the Board accused the banks of agreeing on maximum deposit rates, the increase in interest rates on credit cards, and the commissions and fees for credit card services.

If found guilty of violating competition rules, the banks could be fined up to 10 percent of their turnover, although the Board has never applied a sanction of more than 0.5 percent of turnover in previous such cases.

“There are talks about a total sanction of 3.5 billion lira ($2 billion). But we are expecting a sanction far less than this,” one banking official told Reuters, asking not to be named because the process was not yet complete.


The board will hear defence arguments on Monday from Denizbank, Finansbank, ING Bank and TEB, as well as Akbank and HSBC.

On Tuesday it will hear from Halk Bank, Vakifbank , Ziraat Bank, Garanti Bank, Is Bank and Yapi Kredi Bank.

Turkish Banking Association Chairman Huseyin Aydin, who is also chief executive of Ziraat Bank, said the Competition Board should take into account the importance of the banking sector to the Turkish economy when reaching its conclusions.

“We know the banking sector is not immune from competition rules ... (but) we expect the special structure and function of the banking sector to be taken into consideration,” he said.

The investigating committee has called for the banks’ actions to be qualified as a cartel, which could mean an additional fine of a further 2 to 4 percent of turnover.

“The upper limit would hurt the profitability of banks considerably,” wrote Ayse Colak, executive vice president at Tera Brokers.

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