TURKISH STATISTICAL INSTITUTE WORKSHOP ON ISLAMIC FINANCE IN

TURKISH STATISTICAL INSTITUTE WORKSHOP ON ISLAMIC FINANCE IN THE NATIONAL ACCOUNTS Calculation of output and value added of Islamic financial Services (Banks) TURKEY 31 October - 02 November 2018 SESRIC, ANKARA Department of National Accounts INSTITUTIONAL SECTOR ACCOUNTS 22. 2. 2021 1

TURKISH STATISTICAL INSTITUTE Outline • Overview of Financial Sector • Islamic banks in Turkey • Data Sources • Calculation of P 1, P 2, and GVA Department of National Accounts INSTITUTIONAL SECTOR ACCOUNTS

TURKISH STATISTICAL INSTITUTE Overview Financial System of Turkey Financial System Banking Institutions CBRT Banking Institutions Conventional Banks Islamic Banks Non-Bank Financial Institutions Capital Market Consumer Finance Stock / Equity Leasing Companies Bonds & Sukuk Factoring Companies Derivatives Department of National Accounts INSTITUTIONAL SECTOR ACCOUNTS 3

TURKISH STATISTICAL INSTITUTE Regulatory Authorities Conventional banks • Banking Regulation and Supervision Agency (BRSA) • CBRT Non Bank Financial Institutions • BRSA Islamic Banks • BRSA • CBRT Capital Market • Capital Market Board Insurance Department of National Accounts INSTITUTIONAL SECTOR ACCOUNTS • Ministry of Treasury and Finance

TURKISH STATISTICAL INSTITUTE Islamic Banks in Turkey • Islamic Financial Institutions were first established in 1983 • In 2005 with the amendment of Banking law; Islamic finance institutions were renamed as participation banks (Islamic banks) • There are currently 5 Islamic banks active in Turkey. Additionally, 32 deposit banks and 13 development and investment bank operate in Turkey. • The share of assets of Islamic banks inclined from 2, 5% to 5, 5% within the banking system during the last 10 years. Accordingly their output is also increasing. Department of National Accounts INSTITUTIONAL SECTOR ACCOUNTS

TURKISH STATISTICAL INSTITUTE Regulation of Islamic Banks in Turkey • The Banking Law 5411 is the main regulation for Islamic Banks • The Regulatory Body BRSA is a member of the The Islamic Financial Services Board (IFSB) • The Participation Banks Association of Turkey (TKBB) acts as a “secondary regulatory body” according to the banking law and regulations of the responsible authority; BRSA • Under the TKBB, there is an advisory board that determines and issues the islamic financial standarts. • Balance sheet, income statement and all related data is collected and disseminated by BRSA (and CBRT) • The Turkish Statistical Agency receives data on a montly, quarterly and annual basis from BRSA Department of National Accounts INSTITUTIONAL SECTOR ACCOUNTS

TURKISH STATISTICAL INSTITUTE Islamic Financial Products in Turkey Financial Instruments Certificates of rent Murabaha Mudaraba, müşaraka Tavarruk Gold Banking Current Accounts Participation Accounts Investment Funds Commodity Murabaha Credit cards Tekaful Derivatives Source: BRSA Department of National Accounts INSTITUTIONAL SECTOR ACCOUNTS

TURKISH STATISTICAL INSTITUTE The Process of Data Compilation Calculation process flow of private accounting system for NA concepts DATA SOURCES BRIDGE TABLE (INCOME STATEMENTS, ETC) (TURNING THE DATA INTO ESA TRANSACTIONS NA ADJUSTMENTS (R&D, OAS, ETC) RESULTS (P 1, P 2, B 1 G, ETC Department of National Accounts INSTITUTIONAL SECTOR ACCOUNTS 22. 2. 2021 8

TURKISH STATISTICAL INSTITUTE The Data Sources: S. 12 Survey Administrative Data - SUT 2012 Survey - Structural Business Statistics (SBS) - R&D Survey - Revenue Administration’s Register (RAR) - Banking Regulation and Supervision Agency (BRSA) - Capital Markets Board (CMB) - Saving Deposit Insurance Fund (SDIF) - Central Bank (CBRT) - Ministry of Treasury and Finance - General Directorate of Public Accounts (GDPA) - General Directorate of Foundations (GDF) Department of National Accounts INSTITUTIONAL SECTOR ACCOUNTS 22. 2. 2021 9

TURKISH STATISTICAL INSTITUTE INCOME STATEMENT ESA_Code ESA__Definition Personnel Expenses D. 11 Compensation of employees Taxes, Duties, Charges and Funds D. 29 Other taxes on production Profit Share Income from Loans D. 41 Total Interest before allocation FISIM Profit Shares Paid to Participation Funds D. 41 Total Interest before allocation FISIM Dividend Income D. 42 Distributed income of corporations Fees and Commissions from Total Loans P. 11 Market output Revenues from Banking Activities P. 11 Market output Other Non Interest (Other) Income P. 11 Market output Fees and Commissions Paid Depreciation P. 2 P. 51 c Intermediate consumption Consumtion of fixed capital Department of National Accounts INSTITUTIONAL SECTOR ACCOUNTS 22. 2. 2021 10

TURKISH STATISTICAL INSTITUTE • FISIM is also calculated for Islamic Banks. • Funds collected and Extended funds are used similar to Deposits and Loans of Conventional Banks Department of National Accounts INSTITUTIONAL SECTOR ACCOUNTS 22. 2. 2021 11

TURKISH STATISTICAL INSTITUTE Share of Finance and Insurance to GDP at Current Prices YEAR Financial and insurance activities 2010 2, 9 2011 2, 7 2012 2, 9 2013 3, 1 2014 2, 9 2015 3, 0 2016 2017 3, 3 3, 2 Source: TUİK Department of National Accounts INSTITUTIONAL SECTOR ACCOUNTS 22. 2. 2021 12

TURKISH STATISTICAL INSTITUTE 2017 BANKS THE NUMBER OF BANKS ASSETS FUNDS COLLECTED FUNDS ALLOCATED MILLION TL SHARE% MILLION TL SHARE % Deposit Banks 33 2. 922. 680 89. 71 1. 613. 389 93. 87 1. 905. 940 88. 83 Participation Banks 5 160. 136 4. 91 105. 310 6. 12 106. 733 4. 97 Development and Investment Banks 13 175. 002 5. 37 0 0 132. 807 6. 19 Total 51 3. 257. 819 100 1. 719. 149 100 2. 145. 480 100 Source: TKBB Department of National Accounts INSTITUTIONAL SECTOR ACCOUNTS 22. 2. 2021 13

TURKISH STATISTICAL INSTITUTE Thank you for your time & attention Department of National Accounts INSTITUTIONAL SECTOR ACCOUNTS 22. 2. 2021 14