Turkey’s Akbank climbs up the best-buy tables

| March 20, 2008 | 0 Comments

Another foreign bank to climb the best-buy table is Akbank, a subsidiary of the largest commercial bank in Turkey of the same name. The bank entered the UK market in May 2006 and has been expanding since that time.

The bank is an extremely good proposition and follows in the footsteps of a number of other foreign subsidiaries to set up in the UK recently.

These include Nigerian-owned FirstSave, ICICI of India, Dutch-owned ING Direct, Icelandic-owned Landsbanki and Icelandic-owned Kaupthing Edge.

First Bank of Nigeria (FBN) started a savings arm in the UK in July 2007, competing with 2 banks that entered the UK market in 2003 - ING Direct, the UK arm of Dutch bank ING and ICICI UK, the Indian subsidiary that launched the HiSAVE account.

Iceland’s oldest bank Landsbanki, which has the Icesave account, opened here in 2006, followed by Icelandic bank, Kaupthing Edge, this year.

Like the financial institutions mentioned above, Akbank is a member of the Financial Services Compensation Scheme, although it operates under a less attractive ‘passport’ system like ING and Icesave whereby any compensation paid is split between schemes in the UK and the host country.

For example, any deposits in Akbank are covered up to £35,000 like any other bank in the UK, however, savers would receive €38,000 (£29,600) from the Dutch compensation scheme (where the Turkish bank’s European headquarters is based) and the remaining £5,400 from the UK scheme.

However, Akbank has not signed up to the Banking Code, the industry’s voluntary code that sets minimum service standards for banks and building societies. Unlike any of the other banks, it also has failed to introduce any savings guarantees on its products, which means the headline rate could be lowered below base rate at any time.

In spite of not introducing this protection, the Turkish bank continues to tempt customers with table-topping rates. Its savings account is currently offering 6.25%, which is 1% above the base rate, while its one-and two-year Deposit Accounts are ranked among its rivals at 6.75% and 6.3% respectively.

Its UK branch has just 8 people to deal with its approximate 2,500 customers and £90 million worth of assets.

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