Turkish banks strengthen strategies in response to the imminent risk of earthquakes.

The growing concern about earthquakes in Turkey has led banks to revise their risk management plans. Among them is BBVA, which has intensified its strategies in its Turkish unit, Garanti, and other major lenders. BBVA's recent takeover bid for Garanti has resulted in a notable increase in the value of its shares, which now exceed 100 lira, placing the entity in a prominent position against competitors like Sabadell. However, this financial success contrasts with the anxiety generated by seismic activity in the region, forcing financial institutions to adopt a more proactive perspective. Denizbank's recent purchase of a building in Istanbul's exclusive commercial district highlights a paradox in the real estate strategy of banks. Despite acquiring an imposing headquarters, the entity has begun to explore offices in other cities, such as Ankara, due to the growing awareness of seismic risk. This reflects a shift in mentality within the financial sector, where safety and operational continuity are valued over the ostentation of assets. Istanbul, with a population of nearly 16 million, sits atop the dangerous North Anatolian Fault, a fact that has not gone unnoticed by experts. Following the devastating earthquakes that shook southeastern Turkey last year, the banking sector has responded to criticisms regarding the authorities' lack of preparedness and has begun to implement contingency plans. The relocation of offices and teams to Ankara has become a priority for some banks, aware that the capital offers greater safety against natural disasters. The Central Bank of Turkey has also taken measures to ensure the continuity of its operations in the event of a disaster. The call for staff to the new headquarters in Ankara is an attempt to ensure that the institution can continue functioning despite any seismic eventuality in Istanbul. This approach reflects the growing need for resilience in an environment where seismic activity is increasingly imminent. Experts warn that the risk of a major earthquake in Istanbul is real, with estimates suggesting the possibility of a magnitude 7.5 event. Preparing for a disaster of such magnitude is not only a challenge for banks but extends to all industries present in the city. Industrial production, which accounts for around 40% of the country's facilities, is located in an area with a high seismic risk, exacerbating the situation. Erdal Bahcivan, president of the Istanbul Chamber of Industry, has emphasized the need for industrial companies to assess their facilities and strengthen their earthquake resistance. With many buildings constructed before 1999, when building regulations were revised, the vulnerability of these structures becomes an urgent issue that cannot be ignored. Coordination among industries and awareness of insurance coverage are equally critical. Projections of the economic impact of an earthquake in Istanbul are alarming. Insurers estimate that the cost could reach $300 billion, a figure that represents approximately 27% of the country's GDP. Insurance companies could face losses ranging from $25 to $30 billion. This type of scenario highlights the severity of the risk and the urgent need for adequate planning. Historically, Istanbul has been a city struck by devastating earthquakes, leaving an indelible mark on its infrastructure. With at least two major earthquakes documented in the past, the collective memory of the city is marked by destruction and loss of life. In fact, the last major quake, which occurred 25 years ago in Izmit, resulted in a financial crisis that transformed the country's political landscape. The Turkish government is aware of the seismic threat, and while efforts have been highlighted by the Minister of Environment and Urbanization, there is an urgent need to prioritize the renovation of vulnerable buildings. The estimated cost to make structures resilient is $20 billion, a figure that contrasts with the World Bank's projection of $465 billion to reinforce or rebuild millions of residential units. However, the population density and fragmented nature of property ownership in Istanbul present an additional challenge. Many apartment buildings belong to different owners, complicating any attempts to renovate or strengthen the structures. This adds to the current economic difficulties faced by the country, exacerbated by inflation and other factors that limit the potential for significant investments in infrastructure. In this context of uncertainty, the community in Istanbul faces a dilemma. As banks and public institutions work to prepare for the imminent threat of an earthquake, it is essential that the population and businesses also engage in resilience planning. The lingering question is: Is Turkey truly prepared for the next major earthquake, or is it simply waiting for it to happen before reacting?