Turkey’s banking sector is the backbone of the national economy and accounts for 88.2 percent of the country’s financial system. There are currently 51 banks in operation, but the industry’s history is littered with banks that fail to meet regulatory standards or have poor capital management. These failures are not just businesses. These are structural shocks that change the flow of money within a country.
Here, we profile nine banks that failed, merged or were acquired, detailing how they failed and where they’re going.
Demirbank: From private owner to foreign acquisition
Demirbank was founded in 1953 by Cıngıllı Holding and has been operating in Istanbul for several decades. It remained active until 2000, when it was no longer able to meet its necessary capital requirements. As a result, the Thrift Deposit Insurance Fund (TMSF) takes control of the institution.
By 2001, TMSF had sold all of Demirbank’s shares to HSBC. HSBC subsequently removed the bank from the Banking Supervisory Authority (BDDK) register, removing the Demirbank brand from the Turkish market. At the time, the move was a standard procedure for resolving failed private banks.
Sümerbank: the first state investment with a private destiny
Sumerbank is the first state-run investment institution in the Republic of Turkey. Founded by Mustafa Kemal Atatürk on July 11, 1933, it has great historical significance. Initially, the aim was to support the textile industry, but eventually it expanded to include steel mills, cement plants and paper mills. Over time, these industrial assets were separated into separate entities.
Despite its state-owned origins, Sümerbank’s banking arm faces turmoil. From 1987 to 2001, the bank went through several corporate structures. Finally, the bank was transferred to Oyakbank Group in 2001 and became part of Oyakbank A.Ş. It no longer exists as an independent brand and is integrated into the larger private banking entity.
Pamuk Bank: Unlimited corporate loan risk
Pamuk Bank was founded in Adana in 1995 to finance cotton producers in the Cukurova region. By 1973, it was purchased by Çukurova Holding Group for 17 million liras (note: historical records often refer to this era in different ways, but sources state the date of acquisition). The bank is known for granting unlimited credit lines to parent companies.
This financing structure allows the holding company to use public deposits instead of equity investments to acquire major media assets such as Turkcell and Digitürk. BDDK intervened when regulators discovered that BDDK was using public funds to finance its business interests. Management was transferred to TMSF in 2002. After two years of state administration, Pamukbank was transferred to Halkbank and incorporated into the state’s banking operations.
İmar Bank: 9 billion lira loss
İmar Bank was founded on April 22, 1928, with a capital of one million Turkish Liras, and is one of the oldest banks in Turkey. The bank operated independently for 75 years until it was taken over by the Uzan Group in 1928. The collapse of the bank in 2003 had a devastating effect on the Turkish economy.
Regulators found key bank officials used unregistered accounts and the “GMO4” program to hide deposits. The BDDK took control of the banks’ boards and regulators. The consequences were serious: the collapse cost the country nine billion lira, making it one of the biggest banking scandals in the country’s history. The involvement of the Uzan family marks a dark chapter in corporate governance and banking regulation.
Esbank: chain of mergers
Esbank was founded in 1927 in Eskisehir as a regional bank. It expanded over the decades, becoming a single branch in 1955 and then expanding again. It joined the Zeytinoğlu Holding group in 1977.
By 1999, Esbank had not met the statutory requirements and was handed over to TMSF. However, the result was a complex merger rather than liquidation. In 2001, Esbank merged with Interbank to become Etibank. Later, TMSF itself took over Etibank and eventually merged with Bayındırbank. Esbank’s identity was lost in several consolidations due to regulatory pressure.
Türk Ticaret Bankası (TTB): The end of the first private bank
Türk Ticaret Bankası was Turkiye’s first private bank, founded in Adapazar in 1913 and moving its headquarters to Istanbul in 1952. By 1990, the bank had grown to 412 branches and approximately 8,300 employees.
Despite its size, the bank was privatized by the state and taken over by TMSF in 1997. It was sold in 1998 to businessman Korkmaz Yiğit. Transfer failed. By 2001, the bank lost its license to accept deposits and conduct banking activities. After the liquidation decision made in 2002, BDDK officially removed TTB from its register. This is a warning about the risks of acquiring bankrupt financial institutions.
Bank Ekspers: The journey of multiple owners
Bank Ekspers is a foreign bank. Its ownership history is a series of acquisitions that highlight the volatility of the industry. In 1994, the company was bought by Doğuş Holding and three years later by Korkmaz Yiğit Holding.
The bank was transferred to TMSF in 1998 due to its weak financial position due to capital resources exceeding its equity. In 2001, Tekfen Holding bought the bank and merged it with Finansman Bank A.Ş. and Tekfen Yatırım. The entity was then sold to Eurobank EFG in 2007 and renamed Eurobank Tekfen. The financial institution was acquired by Kuwait-based Burgan Bank in 2013 and now operates in Turkey under the name Burgan Bank. The original brand has completely disappeared.
Yurtbank: Integration with Oyak
Yurtbank, founded in 1993 as Eurocredit Türk Fransız Ticaret Bankası A.Ş., is a foreign bank established in France. Two years later, it was acquired by Balkaner Holding and renamed Yurt Ticaret ve Kredi Bankası.
The bank eventually merged with several other financial institutions, including Egebank, Yaşarbank, Bank Capital and Ulusal Bank, to form a larger organization under the Sümerbank umbrella. In 2001, the shares were transferred to Oyak Holding. On January 2, 2002, the BDDK approved the merger of Yurtbank and Oyakbank. Like many others, Yurtbank no longer exists as an independent brand, but has merged with a larger, more established company.
Dışbank: From joint venture to Fortis Bank
Dışbank was founded in 1964 as a joint venture between Bank of America and Türkiye İş Bankası. It started its operations in 1971 as Türk Dış Ticaret Bankası A.Ş. (Turkish Foreign Trade Bank). The bank’s shares were listed on the Istanbul Stock Exchange in 1990 and later bought by Lapis Holding.
The last change of the bank took place in 2005.
