The Striking Bankruptcy Story of Demirbank – Webtekno

He has been engaged in trade for a long time and is one of the leading business people of Kayseri. Cıngıllıoğlu familyAt that time, it stood out with its construction materials and iron trade.

By the 1950s, the Turkish economy was trying to grow under the leadership of the private sector. Access to loans became easier and the growth of companies accelerated. Thus, in 1953, under the leadership of Nuri Cıngıllıoğlu, with 79 partners, mostly blacksmiths, Demirbank was established.

Demirbank begins to grow with firm steps after its establishment.

Demirbank, which opened its first branch in Istanbul, in the 1960s increases the number of branches.

Of course, here too, one of the founders by Nuri Cıngıllıoğlu It is known that he made a great effort.

Demirbank, which managed to become a very effective bank in the iron sector, invested in different sectors in the 70s and put in capital. is trying to expand its areas of activity.

But After the coup in the 80s Important decisions that will affect the banking sector also significantly affect the future of the bank.

The opening up of the Turkish economy and the start of liberalization increases competition, and this also affects Demirbank.

Increasing competition with the relaxation of strict controls and the release of supervised interest rates in banking make Demirbank facing serious competition leaving.

In 1988, Halit Cıngıllıoğlu became the head of Demirbank and period of rapid growth of the bank starting.

In the 1990s, Demirbank becomes one of the largest banks in Turkey and has nearly 200 branches in 2000. Turkey’s 5th largest bank manages to be.

However, in those years, problems in the Turkish economy and variability in interest rates emerged.

The variability in rates is for investors who see the opportunity here. both big risk and big return means.

Halit Cıngıllıoğlu, who saw this opportunity and accepted the risk, invested in these instruments within the bank. a large portfolio of bills and bonds It creates.

In those year’s, With the influence of the agreements made by Turkey with the IMF Major changes are taking place in the economy, and Demirbank, having invested in the right tools, is taking the cream of these changes, which will later result in very bad results.

In summary, Demirbank invests in bonds that provide high interest income. Before the 2001 crisis manages to make quite large profits.

In the early 2000s, changes were taking place in the unstable economy to the detriment of Demirbank.

The rise in inflation and interest rates caused the huge bond and bond portfolio held by Demirbank. to lose value caused.

Demirbank, which constantly invests more in these tools in order to prevent the inevitable end and keep prices balanced in this process. further expanded its portfolio And it was literally a ticking time bomb.

In addition, both the spread of rumors that the bank was in trouble and the aggravation of other banks’ conditions for lending to Demirbank caused the bank’s liquidity crisis caused it to enter.

The excessive rise in interest rates both reduced the value of investments and increased borrowing costs.

The crisis that came insidiously during this period occurred before Demirbank. collapse of two banks took the initiative and further triggered this crisis.

For this reason, the bank that is no longer able to survive Transferred to TMSF and this triggered the collapse of other banks, resulting in one of the biggest crises in Türkiye’s history.

If it’s Demirbank HSBC was purchased by…

Our other content about Turkish companies that may interest you: