Chairman of the Board of Directors, Fibabanka A.Ş.
Pilott Girişimcilik Zirvesi 2015 | Hüsnü Özyeğin
About Hüsnü Özyeğin
Hüsnü Özyeğin, chairman of the board of directors at Fibabanka AŞ, participated in a program on Dünya WEB TV on August 13, 2021, moderated by Hakan Güldağ, where he spoke with graduates of Özyeğin University. During the event, Özyeğin stated that he had not imagined Özyeğin University would become the top-ranked university in Turkey in student satisfaction surveys within such a short time. He described founding the university as the most significant venture of his life, emphasizing that investing in young people yields returns many times over. In a December 28, 2011 interview, Özyeğin assessed the economic outlook for 2012. He argued that the European Union lacks the fiscal policy unity needed to solve its problems, unlike the United States. Regarding Turkey, he stated that the economy was being managed well, with coordination among the Treasury, Ministry of Finance, Banking Regulation and Supervision Agency (BDDK), and the Central Bank. He suggested that the Turkish lira would stabilize if the current account deficit remained at $50–60 billion annually, and that further monetary tightening might be necessary if inflation was not controlled.
Transcript (35 segments)
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Moderator0:00
Dear guests, the Pilot Entrepreneurship Summit continues. Welcome back. Next, we have a rarely seen success story — one of the most important representatives of the entrepreneurship world in Turkey through his successful ventures, Hüsnü Özyeğin, Chairman of the Foundation. Let me invite him to the stage with a round of applause. Welcome!
I also invite Turkish Telecom Group Strategy and Business Development Deputy General Manager Hakan Dursun to the stage for this valuable conversation. Please come up.
Welcome, sir. You've honored us, thank you. Everyone knows you, so no introduction is needed. You became General Manager of Pamukbank at 32 — something that is a dream for any professional, and you achieved it at a very young age. Then the banking law changed, requiring at least 10 years of experience for general managers.
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Hüsnü Özyeğin1:17
Around 1982, they required at least 10 years of experience for general managers and 7 years for deputy general managers. So I was lucky — I got through that window. They also introduced rules about education; engineers couldn't become bankers. I'm actually a civil engineer, but at the last minute, through a friend at the Ministry of Finance, I got them to include a clause that engineers with an MBA could qualify. So I didn't lose my job.
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Moderator1:52
Then you moved to Yapı Kredi. At a peak point in your career, you decided to establish Finansbank. Can you tell us about that experience? What drove you to such a major entrepreneurship when you were already so successful in such a high position?
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Hüsnü Özyeğin2:11
Well, my decision to leave Yapı Kredi — I asked my boss for 1% of Yapı Kredi shares, because I had turned it from a loss to profit, and in 1986 it became profitable for the first time. But my boss said, 'I have other partners, and if I give you shares, I'd have to give them shares too. My company doesn't have that policy.' I accepted that understanding. After that, I thought, can I do something on my own?
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Moderator2:58
Young people here are telling very exciting stories. I've been watching the entrepreneurship session with great enjoyment.
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Hüsnü Özyeğin3:07
My entrepreneurship was quite classical — starting a new bank. Of course, starting a bank then and now is very different. I'd like to advise entrepreneurs that everything is about timing. If you can do something, do it immediately. In 1987, the treasury granted a bank license for 2.5 million dollars. Today that figure is 300 million dollars. I had a villa in Alarko and a flat in Ortaköy given to me by my boss. I sold both, and we moved into a rental apartment with my wife and two children. The message here for entrepreneurs is: when you enter a business, you put your money and your life into it. You can't say 'I'll sell the house and use that money.' You have to take risks. I sold everything and put all my money in. Then I brought in some partners to increase the capital.
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Moderator4:58
You brought in 21 partners, which is interesting.
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Hüsnü Özyeğin5:01
Yes, and I sold the shares to my partners at a premium — the nominal value plus a premium. Back then, 1% of the bank cost $80,000 based on the $2.5 million capital, but I sold it for $120,000. The $40,000 difference between $120,000 and $80,000, I put into the bank myself as my own contribution. Among those 21 partners, only one father bought 1% shares for each of his two children. One of those sons held his shares for 19 years without selling. When Finansbank was sold for 5 billion dollars, his 1% was worth 50 million dollars. That's an astronomical return on investment.
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Moderator5:47
You were 42 when you started Finansbank. In such a strong position in the industry, with so many career alternatives, with a certain financial accumulation — weren't you scared at all?
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Hüsnü Özyeğin6:05
I was never scared, because there were actually no other opportunities. There was nowhere for me to go in the industry. Yapı Kredi was one of the two largest private banks at the time, and my childhood friend Mehmet Karat was my boss. I couldn't find a boss like him anywhere — he was a wonderful man who gave me full control. I was both general manager and head of the executive board at Yapı Kredi. I couldn't have found an environment like Yapı Kredi to succeed. The other two major banks — Akbank was similar in size, and İş Bankası had a different shareholder structure. There was no reason for me to go to either of them.
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Moderator6:59
Some friends told you 'You're an emperor, where are you going?'
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Hüsnü Özyeğin7:02
Yes, because the general managership of Yapı Kredi was something special back then — not like today. Getting credit from banks was very difficult. Bank managers didn't come to you; you had to wait a week just for an appointment with a branch manager. So there was nowhere for me to go. That's why I embarked on this venture.
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Moderator7:31
What gave you the confidence?
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Hüsnü Özyeğin7:35
What I trusted most was that through 13 years in senior management at two banks, I knew Turkey very well and had built strong relationships with major corporate clients. I would go to Gaziantep and Ordu every year when nobody else would. I pioneered institutional marketing — going to the customer's location and approving their credit right there after proper due diligence. So I trusted that if I opened a bank, these clients would immediately bring me business. My target was something like Citibank — only 4 branches, purely corporate banking. I didn't even open branches on the ground floor; I went to the 5th or 6th floor to keep rent low and avoid risky deposit collection. We started by bringing in foreign credit and extending it to clients. I started with 24 people from Citibank, eventually hiring 89 of their employees — young people with 2 to 5 years of banking experience.
Interestingly, 19 years later, on Citibank's 40th anniversary, they held a dinner in Istanbul. Their CEO Michael Corbett came. I told him the story. When Finansbank was sold, first the National Bank of Greece bid, and then Citibank offered the highest price. It's ironic — the people I recruited from Citibank built the bank, and then both Citibank and the National Bank of Greece ended up bidding on it.
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Moderator10:00
What was your motivation when founding Finansbank? Motivations change at different career stages — first it's money, then power, then enjoyment, then writing a success story. What really drove you?
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Hüsnü Özyeğin10:21
In my mind, it was always about achieving something, being creative, doing something differently. Of course, this is done through people. One of the most interesting things I did in banking was turning non-bankers into bankers. My first five deputy general managers at Pamukbank had no banking background and later became very successful. Akın Öngör, who became Garanti Bank's general manager, had no banking experience. Burhan Karaçam became Yapı Kredi's general manager — no banking background. İbrahim Betül, Vural Akış — Vural was a math teacher in Eastern Turkey. All of them later became bank general managers. I call this group the 'Dream Team.' The generation that came after them naturally followed. Before us, no graduates from Boğaziçi or Middle East Technical Universities entered banking. After we started hiring from these universities, we brought in people with good English who had studied business. We brought in people with a business management mindset, because at the highest level of banking, that business acumen is essential.
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Moderator12:41
You've written one of the greatest success stories in Turkish business, but success and failure go hand in hand. Have you experienced failures in your career? How did you evaluate them? Are there lessons we can learn from that?
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Hüsnü Özyeğin13:06
Of course there were failures. In fact, I organized Turkey's first 'Failure Summit' at Özyeğin University, because everyone talks about their successes at these events and receives plaques. Ali Sabancı came and others — Ali is one of Turkey's most successful entrepreneurs, but he has his own 'broken notes' too. Before selling the bank, I ventured into some other businesses. One of them was Gima — a supermarket chain. We bought it for 27 million dollars. It was like a state-run entity. Even my wife, when she visited the Gima store in Kızılay, Ankara, said it reminded her of Soviet-era shops where only diplomats would shop. That's exactly what it was. They sold both food and clothes — there were clothes in the window display.
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Moderator14:25
When did you buy and sell Gima?
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Hüsnü Özyeğin14:29
We bought it in '96 and sold it in 2005. I was very happy when I bought it, but even happier when I sold it. In Turkey, there's a cultural phenomenon — when you sell something, people feel sorry for you, saying 'oh, he sold.' In Anatolia, people prefer to rent rather than buy property, and selling assets is not seen as a good thing culturally. But for an entrepreneur, knowing when to sell is extremely important. My mistakes — everyone thinks failure means the business itself failed, but the important thing is when you sell, whether you're following the market cycle, what price you got, and whether you stayed too long. That's more where the real failure lies.
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Moderator15:32
For example?
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Hüsnü Özyeğin15:35
With Finansbank, I was lucky with the timing — I sold at 3.6 times book value. Today, bank multiples are 1 to 1.5. If I sold today, I'd get maybe 1.5 to 1.8 billion, but back then it was much more. Finansbank was very successful and grew further after the sale. But with failures, like Gima — when you don't know a sector, finding the right people is also very difficult because you're hiring from other companies. The employee quality in banking was high, so the bar was different. We grew it a bit, and then large foreign companies came to Turkey. That's actually why I sold — how could I compete with Tesco and Carrefour? If I sell 10,000 umbrellas a year and buy them from China, Carrefour probably buys 10 million, so their price is lower. In the food business, you don't win on non-food; everyone sells the same cheese, meat, and produce. I sold for 260 million dollars. Everyone thought I made a lot of money, but I had also invested heavily in the company over the years. It tired me a lot, that business.
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Moderator17:18
But Gima had other benefits too, didn't it?
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Hüsnü Özyeğin17:22
Yes — Gima actually became the real value for Finansbank. At the time we acquired Gima, Finansbank hadn't entered retail banking yet. Through Gima, I learned a great deal about individual consumer behavior. And the most interesting thing — Gima's real value was for Finansbank's credit card business. Finansbank was far behind other banks in credit cards because of having few branches and few accounts. Other banks gave a credit card to every account holder. While they had a million credit cards, we had only 35,000. In 1999, we started selling Gima-branded credit cards, setting up stands inside the stores, leveraging that database. We opened in-store branches, offering banking services on Saturdays and Sundays. We also created a card — the first of its kind in Turkey — combining installments with Visa. Now there are similar cards everywhere, but we did it first. We called it the Galaxy Card and started selling food on installments. We even made a TV ad with a red tomato on screen saying 'You can buy tomatoes in installments.' Very quickly, Finansbank's card portfolio grew to several million, which contributed significantly to the bank's total value.
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Moderator19:18
So you essentially retailized banking products — putting them on store shelves.
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Hüsnü Özyeğin19:20
Exactly. Another interesting thing I did was open a bank in Russia in 1997. At that time, foreign banks hadn't even started getting licenses to operate there yet. But I have this thing — wherever I go, a big crisis seems to follow about a year later. I chose my timing poorly. I opened the bank in August 1997. A year later, when we were going to celebrate the anniversary, Russia declared a moratorium in August 1998. Russia said it wouldn't pay its domestic government bonds — the GKOs denominated in rubles. Their foreign debt was small, only 35 billion dollars, and they paid that, but the ruble bonds they refused. We had entered the Russian market. We were small, thank God, so we didn't take major losses. But after that, we achieved great success there. Now Russia has some problems again. Everything is about timing — holding too long is not good, exiting too early is not good.
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Moderator20:54
Last year we had a Harvard professor here who said that for entrepreneurship to succeed in Europe, Americans need to learn to sell. That aligns with what you've said. We have thousands of young entrepreneurs watching, especially your interview. What would you advise them? What should they pay attention to?
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Hüsnü Özyeğin21:25
First, entrepreneurs need to select very good mentors — people who have done entrepreneurship before, who can test their ideas. At Özyeğin University, we established an Entrepreneur Factory to provide this service with our professors and successful mentors. Entrepreneurship is such a thing that even at young ages — we offer opportunities to high school students too. As a university, we organize elevator pitch competitions, inter-high school robotics competitions, and various activities. Being an entrepreneur means being a risk-taker. Especially at young ages, in high school and university, being active in student organizations is essential. Working during university is very important. Unless you have an incredible talent or idea like Bill Gates or Mark Zuckerberg, I recommend finishing university. I advise all young people to work. We promise internships to every student with a 2.5 GPA or higher. We tell them — even if you're a law student, go work at a five-star hotel, do waitering, wash dishes. You won't be able to do these later, so gain different experiences now.
Entrepreneurship is partly about patience, but also about entering the market quickly. You must put your life and money into this. Never lose your courage. Learn to start fresh every day. Wake up excited every morning — excitement and energy are so important. What can I do today to contribute to my ideas? Networking is crucial in every aspect of entrepreneurship. This network will provide you with capabilities and team members you don't already have. Networking also means finding financing. I noticed something during the presentations today — one group came out as a three-person team. That team spirit is very important. An entrepreneur must constantly dream, but also set achievable targets. Don't fear failure — take risks. I also recommend that young people work at an institution for a while. Don't jump straight into entrepreneurship after graduation. Working at an institution provides networking opportunities and helps you understand an industry. If you work in banking, you see many different industries. Or if you work at an audit firm for a few years — I recommend that too.
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Moderator25:20
Thank you so much, Hüsnü Bey. I also want to congratulate Turkish Telecom — they've been wonderful with their support, and I've spoken with their general manager. Outside in the foyer, we can discuss potential collaboration with Özyeğin University.
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Hüsnü Özyeğin25:35
We'd be very happy to collaborate. We'd love to work together. We've also launched Turkey's first entrepreneurship undergraduate program — a four-year degree. It's not only for aspiring entrepreneurs; our engineers, lawyers, and business students also take courses from it. We also have courses on social entrepreneurship. We're working to produce well-rounded graduates. There's a lot to learn from professors and academic environments too. We'd be happy to collaborate, as long as we grow the entrepreneurship ecosystem together. I congratulate all the entrepreneurs and wish them success.
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Moderator26:18
Thank you very much, Hüsnü Bey. We're deeply grateful. A round of applause, please.