AKBANK PART A: A CRISIS IS A TERRIBLE THING TO WASTE

Abdul Basit Jawad Khalid Syed Nael Naqvi Umer Arshad Shah Noorullah Khan Zuhaib Hassan

Overview: Introduction

Alternative Growth Strategies

Growth through Acquisitions Organic Growth

Growth through Acquisitions

68 private banks Larger banks were publicly listed while smaller banks were privately held Some banks occurred losses due to high interest rates and depreciation of Lira. Either buy a healthy competitor or purchase a restructured bank Privatization Ziraat, Halk, Vakif

Organic Growth

Apart from acquisitions the other was organic growth. This is the internal growth of any bank. AkBank had the opportunity to enter new markets and reach new locations, demographics and introduce new products and services. AkBank was considered too traditional and had an image that it was a credible bank as it could even be trusted in a period of uncertainty or a banking crisis.

Problem Identification

In 2001, Akbank enjoyed a unique position in the Banking sector in Turkey. Although the country was in the midst of a severe economic and banking crisis, Akbank was enjoying a robust position in the market. The bank had amassed a large amount of cash and was also very well capitalized while its competitors were struggling to stay liquid. The issue facing Akbank in this environment was how to use its competitive strengths and take advantage of its faltering competitors and the general economic crisis engulfing the nation.

Akbank had a unique opportunity to grow and expand in this climate of economic turmoil because while its position remained stable and strong, the banking industry as a whole was floundering, with a significant number of banks struggling for survival. In this climate, Akbank had a chance to improve its market share and profitability and grow and expand. But before the bank could attempt to expand, it had to decide on a strategy that it could viably and feasibly adopt to achieve its goals.

Solution

AkBank had two options Acquisition Organic Growth We would recommend AkBank to go for Organic growth, in which it should look for opportunities for internal growth rather than acquisition The opportunities could be of catering to new markets, reaching to new geographic areas and offering new products and services.

To cater to new markets new branches could be opened. AkBank was too traditional, should be more customer oriented in which it should come up with new products and services according to the needs of the customers. Lastly AkBank should revise its regulations( loan provision and risk management) and implement them well, as banks were not properly following international standards.