Turkey

IRCIEF: An important step toward Istanbul becoming world's Islamic finance and banking capital

Istanbul's Sabahattin Zaim University established the International Research Center for Islamic Economics and Finance (IRCIEF) in order to produce relevant research to guide policy design and implementations. It also organizes workshops and training programs to provide society with opportunities toward a better understanding of Islamic economics. According to IRCIEF director Prof. Dr. Arif Ersoy, the center will also intensify its research activities on finding new solutions for the problems encountered by SMEs, who are the main consumers of Islamic banks. IRCIEF offers graduate studies on Islamic Economics and Finance, furthermore post graduate studies on Islamic Economics and Law in Arabic. For next year the center is planning to open the programs in English as well.

#Turkey aims to triple market share of Islamic finance

Turkey is committed to tripling the market share of Islamic finance, bringing it up to 15 percent by 2023. Deputy Prime Minister Mehmet Simsek said the Islamic finance market had been growing swiftly in Turkey and that the government aimed to further boost the sector. Simsek also pointed out the slowdown in global trade, saying there was a discontent against globalism after the recent global crisis. He urged countries to make immediate reforms, recalling the three main themes of the 2015 G-20 summit in Turkey, which were comprehensiveness, implementation and investment. The minister noted the income inequality in the world, saying 62 people’s wealth was equal to 3.62 billion people. He said Islamic finance could play a positive role in addressing this problem.

Istanbul-based university opens Center for Islamic Economics building

Istanbul Sabahattin Zaim University (IZU) is opening its International Research Center for Islamic Economics and Finance (IRCIEF) on Oct. 28. The IZU hopes to become a center for academic studies in the field. Launched by Kuwait, Turk and Albaraka Turk participation banks, the International Research Center for Islamic Economics and Finance will offer market-based education to its students. By offering courses in Turkish and Arabic, the IZU will enable Turkish and foreign students to be specialized in the field. University rector and professor Mehmet Bulut said the center will train equipped students in undergraduate, postgraduate and doctorate programs. He promised that students will be educated in this center with the understanding of making Turkey stronger and noting that the accomplished projects will be carried out in collaboration with the participation banks.

#Turkey seeks huge piece of Islamic finance pie

Deputy Prime minister in Charge of the Economy Mehmet Simsek said the size of the Islamic banking sector globally was projected to grow to $3.5 trillion in the next five years and Turkey aimed to manage a sizeable portion of this huge sector. He said the government was committed to help the sector thrive in Turkey. Furthermore, he indicated that the total size of assets of participation banks reached $183.93 billion by the end of 2015. Pointing out that the participation banks' share in the overall banking sector was 5.1%, he stressed the goal set by the representative of the sector was to attain 15% by 2025. The Turkish Treasury elaborated on the action plan called "Strengthening Interest-free Finance and Participation Banking" as a component of the Istanbul International Financial Center (IFC Istanbul) program. It was decided that the board would work on the issues raised at the meeting to develop the interest-free finance sector.

Finance Ministry initiates works on legal infrastructure of Istanbul's Finance Center

#Turkey's Finance Minister Naci Agbal said the ministry initiated studies on a draft law on the Istanbul International Finance Center (IIFC). Agbal stated that the government introduced new financial instruments step by step, including the founding of the Sovereign Welfare Fund (SWF), real estate certificates and Islamic finance tools, in an attempt to intensify Turkey's financial markets. The draft law on the IIFC aims to offer opportunities to financial players and attract international financial institutions to Turkey. At the IIFC 50,000 people will be employed and it will have 25,000 daily visitors once opened. The joint infrastructure work of the financial center includes an administrative building, a police station, a health center, fire department, continuing education center, various academic courses, a mosque, a nursery, an underground parking lot and a trestle.

Aktifbank starts to operate in Islamic #leasing in #Turkey together with ICD and IMC

The Islamic Corporation for the Development of the Private Sector (ICD), Aktif Bank and Ijarah Management Company (IMC) have signed a Shareholders Agreement for Joint Strategic Collaboration. Aktif Bank has entered into the Turkish leasing sector by acquiring 32% shares of Haliç Finansal Kiralama (Haliç Leasing) and is planning to primarily fund the growth of SMEs in Turkey. Haliç Leasing will be able to raise the long term funds locally and internationally via Sukuk issuances thanks to extensive knowledge of Aktif Bank on capital markets. CEO of Aktif Bank, Serdar Sümer, said that instead of increasing the number of branches, the bank focuses on diversifying its products and alternative distribution channels. CEO of ICD, Khaled Al Aboodi, said that Haliç Leasing will be the eleventh Islamic leasing company that ICD has invested.

Fitch Rates Kuveyt Turk's #Sukuk 'BBB(EXP)'

Fitch Ratings has assigned Kuveyt Turk's proposed US dollar-denominated sukuk certificates an expected 'BBB(EXP)' rating. The expected rating is in line with Kuveyt Turk's Long-Term Issuer Default Rating (IDR) of 'BBB', which has a Negative Outlook. The issuer is KT Kira Sertifikalari Varlik Kiralama (KKSVK), which is wholly owned by Kuveyt Turk. The documentation includes a negative pledge provision that is binding on Kuveyt Turk, as well as financial reporting obligations, covenants, Kuveyt Turk event (including cross default) and change of control clause. Certain aspects of the transaction will be governed by English law while others will be governed by Turkish law.

Bank Asya's shareholders to receive funds remaining after liquidation

According to Savings Deposit Insurance Fund (TMSF) Chairman, Sakir Ercan Gül, Bank Asya's shareholders need to wait until the end of the bank's liquidation process to receive their remaining funds. Gül said the process of paying deposits would not be immediately initiated and the finalization of the liquidation process would be delayed. The law regarding deposits grants a three-month period for payments, which will expire this month. There are nearly TL 2 billion ($653 million) worth of deposits in the bank, including TL 950 million worth of insured deposits. If the bank has any remaining funds after the liquidation process, these will be distributed to the bank's shareholders in accordance with the percentage of their shares. According to Gül, the bank is now hovering between bankruptcy and liquidation.

#OIC celebrates 47th #anniversary in Istanbul

The 47th anniversary of the Organization of Islamic Cooperation (OIC) was celebrated on Saturday in Istanbul. The event was organized by the Research Center for Islamic History, Art and Culture (IRCICA). Halit Eren, general director of IRCICA, said the organization had two main goals, one to restore Islamic cultural heritage in Muslim regions in war and the other to struggle with radicalism. Eren said the OIC works on projects to restore the historical structure in the walled city of Jerusalem and in war-torn Syria. OIC General Secretary Iyad bin Ameen Madani was the main speaker of the organization. In his speech, Madani said the OIC made important steps in social, cultural, economic, technologic and educative domains.

Turkish Private Equity Deals Signal Investment Appetite After Failed Coup

Turkey’s biggest casual dining chain, Big Chefs, sold a minority share to an internationally backed private-equity firm, a sign that resilient consumer demand is drawing some investors to the country, despite July's failed coup rattling the economy. Meanwhile, leading Turkish ice-cream maker Mado is in advanced discussions with Bahrain-based Venture Capital Bank to sell a sizable minority stake, said Mr. Kotan, who is advising the Kahramanmaras-based deserts-and-food company.

State fund probes 1.6 mln Bank Asya accounts for Gülen links

Turkey’s Saving Deposits Insurance Fund (TMSF) has probed more than 1.6 mn bank accounts because a number of public institutions wanted to learn whether any of their employees had an account with Bank Asya. The bank was linked to the controversial Gülen movement, which was believed to be the mastermind behind the failed July 15 coup attempt. In line with these probes, some 700,000 people have been searched since the end of 2013. When suspending public officials after the failed coup attempt, one of the main criteria under consideration was whether they were a Bank Asya customer and if they had made financially suspicious banking transactions. Turkish regulators canceled the banking license of Islamic lender Bank Asya on July 24.

Coup and wars no deterrent for #Turkey realty

Developer of Istanbul financial hub Burak Kutlug says the coup and the conflicts are strictly short-term concerns in Turkey. The property market remains a magnet for investors from the Middle East or other Islamic countries. In recent years, Turkey has been going all out to pull in such investors, particularly through legislations such as the "reciprocity law", whereby anyone who commits to a certain level of funding gets to have citizenship rights. According to a survey by CBRE of the living factor in major cities, Istanbul has seen its real estate recording 25% annual growth. Kutlug believes there’s still headroom for Istanbul prices to grow. The city’s all-round development with the new airport expansion and Eurasia tunnel will more than ensure that.

Islamic Development Bank backs #Turkey's steps for stable growth

Islamic Development Bank (IDB) President Ahmad Mohamed Ali Al Madani has said they are ready to support Turkey to maintain the country's stable investment environment in the wake of the July 15 coup attempt. Al Madani said that the Turkish government has continued to promote domestic and foreign investments by boosting the liquidity of its markets to minimize short-term risks since the coup attempt. He noted that the establishment of the Sovereign Welfare Fund (SWF) is an extremely important development as it will help the government transfer its achievements to strategically important sectors. Al Madani remarked that Turkey will maintain its 3 to 4% growth rate despite its dependency on foreign energy.

Stability, of a Sort: #Turkey’s Islamic Bonds

Islamic entities known as participation banks offer bonds with potentially greater upside and more stability than standard government debt. According to a recent report from Standard & Poor’s, participation banks doubled their share of the country’s overall banking assets to about 5% between 2005 to 2015. Turkish President Recep Tayyip Erdogan’s support for further integration of Islamic law into all walks of life means participation banks are likely to grow. The system’s assets could reach some $300 billion by 2025, according to the Participation Banks Association of Turkey.

IIRA reaffirms ratings of Kuveyt Turk Participation Bank: August 2016

Islamic International Rating Agency (IIRA) has reaffirmed the ratings of Kuveyt Turk Participation Bank (KTPB) at "AA(tr)/A1+(tr)" on the national scale. Ratings on the international scale have also been reaffirmed, with foreign currency rating at "BBB-/A3" and the local currency rating at "BBB/A3". Outlook on the assigned ratings is "Stable". Ratings of KTPB are underpinned by its strong institutional ownership, which is led by Kuwait Finance House. The impact of regional instability on Turkey’s banking industry has been manageable so far. However, the industry may face challenges in the coming periods.

Kuveyt Türk closes H1 2016 with a profit of TRY 256 million

Kuveyt Türk Katilim Bankasi has closed the first half of 2016 with a net profit of TRY 256 million with an increase by 24.4% compared to the same period last year. The bank's total assets have reached 44,1 billion increasing by 4.9% and its shareholders equity has reached TRY 3.7 billion increasing by 8%. Ufuk Uyan, the CEO of Kuveyt Türk, said the bank added 30 new branch offices to its network throughout 2016. Kuveyt Türk aims at becoming one of the top three banks opening the highest number of branch offices in the banking sector.

Kuveyt Turk claims 37 per cent share of #Turkey's participation banking

According to Group CEO Mazin Saad Al-Nahedh, the market share of Kuwait Finance House-Turkey (KFH-Turkey) accounts for 37% of the participation banking in Turkey. The total assets of participation banks as percentage of the total assets of banks in Turkey account for 5-6% and is expected to surge. Growth rates in KFH-Turkey have outpaced the rates in Kuwait, Bahrain and Malaysia. Noting that all Kuwaiti banks were strongly capitalised, Al-Nahedh mentioned that KFH Group’s own capital adequacy ratio surpassed 17% as of end Q1. Commenting on Kuwaiti sovereign debt issuances to Islamic banks, he said that KFH’s share of the debt was 50 per cent, mirroring its market share among Islamic banks in Kuwait.

Bank Asya’s banking license cancelled over Gülen links

Turkish regulators have cancelled the banking license of Islamic lender Bank Asya. The Turkish Banking Regulation and Supervision Agency’s decision (BDDK) came after the Turkish Deposit Insurance Fund (TMSF) temporarily suspended Bank Asya’s banking operations on July 18. According to the TMSF the sale of the bank did not attract any bids on July 15. The tender was for the sale of a minimum 183.6 million A group shares, amounting to 51% of the bank. Bank Asya is affiliated with Fethullah Gulen, who the Turkish authorities accuse of heading a clandestine 'parallel state' to undermine the Turkish government.

#Turkey's banking watchdog temporarily shuts down Bank Asya

The Savings Deposit Insurance Fund (TMSF) announced that the operations of Bank Asya will be temporarily frozen. According to the official announcement, the decision was made by the Fund Council in accordance with Article 107 of the Banking Law. The tender for the sale of Bank Asya's shares was scheduled for Friday and TMSF announced that no bid had been offered for the tender. Although shares were planned to be opened to transactions following the bank's sale, Bank Asya's shares are now closed for transactions. Bank Asya is believed to be the main financial institution for the controversial Gülen Movement, which is accused of large-scale cheating and nepotism.

Turkish regulator shuts down Gulen-linked bank

The Turkish Deposit Insurance Fund (TMSF) announced it would temporarily suspend operations in Bank Asya, which is closely associated with the cleric Fethullah Gulen. Turkish President Recep Tayyip Erdogan blamed Gulen and his supporters for the coup attempt on Friday in which more than 200 people have been killed. The coup attempt was suppressed by early Saturday as 103 army generals and admirals were detained. The arrests now amount to a third of the country’s top military officials.

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