Bloomberg News

Isbank of Turkey to Collect 5 Tons Gold With Jeweler Gulaylar

October 04, 2012

Turkiye Is Bankasi (ISCTR) AS, Turkey’s largest bank by assets, plans to collect five metric tons of gold to increase deposits by 2013 in co-operation with jeweler Gulaylar Kuyumculuk, Isbank said.

“We’d like to get the gold that’s out there into the financial system,” Isbank’s Deputy Chief Executive Officer Erdal Acar told reporters at a news conference in Istanbul today. “This will be an important tool in increasing the tendency to save.”

About 5,000 tons of gold, valued at about $300 billion, is believed to be “stashed under the mattress‘‘ in Turkey, which has an economy of about $800 billion, according to Ozcan Halac, head of the Istanbul Gold Refinery. Banks diversified services this year to attract the hidden gold to boost Turkey’s savings rate, one of the lowest among major emerging markets.

Customers will bring their gold coins or jewelry to Gulaylar shops to be evaluated by experts and equivalent deposit accounts will be opened at Isbank.

Isbank’s gold deposit accounts jumped 10-fold in the two years to June 2012, Acar said. The lender has $1.4 billion of gold deposit accounts, he said. Similar accounts in Turkey’s banking industry grew 12 percent to more than $9 billion, while volume of gold at Turkish banks climbed 23 percent to 179 tons at end-June from end-2011, according to banking regulator data.

To contact the reporter on this story: Sibel Akbay in Istanbul at sakbay@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net


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