Friday, January 7, 2011

Imperial Ottoman Bank

The Imperial Ottoman Bank was founded in 1856 in the capital of the Ottoman Empire, Istanbul. It was a joint venture between British interests, the Banque de Paris et des Pays-Bas of France, and the Ottoman government. The opening capital of the bank consisted of 135,000 shares, 80,000 of which were bought by the British group, 50,000 by the French group and 5000 shares were allocated to the Ottomans.

The Imperial Ottoman Bank carried out the functions of a state bank. In 1875 the Bank was authorised to control the budget and the expenditures and incomes of the state. The bank was also involved in financial support for public works and railways, such as the Beirut Port and the Beirut to Damascus railway line.

The First World War was very damaging for the Imperial Ottoman Bank. It lost credibility with the Ottoman government because of its British and French shareholders, and on the other hand, the British and French governments considered it as an institution belonging to the enemy. After the War most of the Bank's branches had to be closed, while new branches were established in the Near East between 1920 - 1930 to serve British interests.

After the proclamation of the Republic of Turkey in 1923, the Imperial Ottoman Bank became the Ottoman Bank. The Bank's role as a state bank remained until 1933 when it became a commercial bank and finally in 1952 it turned into a private institution.

In June 1996, the Ottoman Bank was sold to the Dogus Group, from which point its banking activities were centered primarily in Turkey. In 2001 the Ottoman Bank became part of the Garanti Bank.

By Mark Matlach

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