Turkey

Turkish Treasury borrows around 1.8 bln lira in 2017 sukuk

The Turkish Treasury said on Wednesday it issued a lira-denominated sukuk with a volume of 1.8 billion lira ($736 million). The instrument will mature on Feb. 15, 2017, the Treasury said on its website. With the latest sukuk, the Treasury's outstanding lira-denominated sukuk amount has increased to 6.8 billion lira. Treasury also has $3.75 billion worth of outstanding dollar-denominated sukuk.

TMSF refuses to relinquish management control of Bank Asya

In spite of the fact that more than 60 percent of Bank Asya's A-type shareholders have submitted the documents requested by the Banking Regulation and Supervision Agency (BDDK) that were the basis for recently taking control of the management of the bank, the watchdog agency has not given up that control, stoking claims that the management takeover was part of campaign of intimidation against the lender. Many believe that the government is not allowing the supposedly independent BDDK to give management control back to the partners. Even though the bank recorded a TL 875 million loss in 2014, its non-performing ratio is still one of the highest in the sector at about 18 percent.

Major loss at Bank Asya

Bank Asya has declared a commercial loss for corporate tax of TL 942 million ($383.44 million) and its "net term loss" for the fiscal period of Jan. 1 and Dec. 31, 2014 was TL 875 million. The bad debts of the bank had increased to TL 2.1 billion in the first nine months of 2014 and now the fourth quarter is being examined. Further, whether loans exceeding TL 3 billion, which were granted in violation of Articles 50 and 51 of the Turkish Banking Code, have been repaid or not will also be revealed after the examination of the 2014 balance sheet as publicly traded companies and banks have to hand in their balance sheets to the KAP. Besides, there are various allegations about the asset management companies to which the bank has transferred its bad debt files.

Bank Asya seizure jump-starts Turkey's push into Islamic banking

Turkey’s takeover of Bank Asya is making the government an even bigger player in the Islamic finance industry, just as state-owned lenders Ziraat Bank, Halkbank and Vakifbank prepare to start Shari’ah-compliant units to challenge the privately-owned banks. Vakifbank will get a $300 million loan from the Islamic Development Bank to help fund its Islamic finance arm, while Halkbank plans a capital raising to finance its unit. The initial idea as announced by officials was that the newly-established banks would not chase existing participation banks’ clients but instead focus on rural areas and increase the total pie. Finance Minister Mehmet Simsek said in an October interview he considered the Islamic finance industry in Turkey to be “under-banked” and that the government looked favourably on the idea of issuing new licenses to lenders.

S&P: Ratings on Turkey unaffected by Bank Asya takeover

The Turkish banking regulator's decision to take over the management of Bank Asya did not affect the country's unsolicited sovereign credit ratings, Standard & Poor's announced Feb. 6. Turkey's current credit rating stands at BB+ with a "negative" outlook. The rating agency sees this decision as an isolated incident and not a harbinger of systemic distress in the banking sector or a determined politicization of Turkey's regulatory institutions, S&P said in the statement. Bank Asya's relatively small size makes it rather unlikely that there could be any contagion effects, it added. Following the Bank Asya takeover, the United States had called on all governments to ensure the monitoring of corporate and financial activity is done in line with international legal standards.

Turkish Regulator Transfers Control of Bank Asya to State-Run Fund

Turkey’s government seized control of Islamic lender Bank Asya and dismissed its executives, marking the latest extraordinary step in a highly politicized monthslong battle over the company. Late on Tuesday, the country’s banking watchdog transferred 63% of Bank Asya’s preferred shares into the state-run Savings Deposit Insurance Fund, which answers directly to the prime minister. The fund then replaced the bank’s leadership with a new chief executive and board of directors. The bank’s shares, which have been allowed to trade only one houreach afternoon since September, dropped 1 kurus to 60 kurus (25 cents), a record low, and then rose to 63 kurus as Istanbul’s market closed.

Gov’t says Bank Asya decision judicial, while depositors flow to bank to show support

The takeover of Bank Asya by the Turkish Savings Deposit Insurance Fund (TMSF) is entirely legal and judicial, but not political, Turkish Prime Minister Ahmet Davuto?lu said on late Feb. 4. Many people continued to show their support to the bank by putting money into their bank accounts Feb. 5, although some others were reported closing their bank accounts. TMSF seized some 63 percent of Bank Asya shortly after the banking watchdog (BDDK) ruled in favor of its seizure on late Feb. 3. The BDDK said in a statement on its website that it seized the bank “because the institution has not presented a partnership structure that is transparent and open enough to allow for effective regulation.” The watchdog appointed a new board of directors immediately after the seizure.

Bank Asya seeks immediate return of ‘hijacked’ management rights

Turkey's largest Islamic lender, Bank Asya, is demanding that the state-run Savings Deposit Insurance Fund (TMSF) return the bank's rights to control its management following strong indications that the fund's decision to take over control of the lender's board has no legal basis and is politically motivated. Turkey's banking watchdog, the Banking Regulation and Supervision Agency (BDDK), handed management control of 63 percent of the privileged shares of Bank Asya over to state savings funds on Tuesday, citing a lack of certain key documents as the reason why the bank cannot maintain its operations. The bank's shareholders are currently preparing to provide the watchdog with the required documents and the bank has separately taken legal action to revoke Tuesday's intervention.

Action against Turkey's Bank Asya ends speculation - minister

Turkish Economy Minister Nihat Zeybekci said on Wednesday a banking regulators' decision to take over management at Islamic lender Bank Asya ends a period of speculation and restores a safer environment. Zeybekci also told a news conference broadcast live on TRT television that it was "unfair" Turkey had to pay a high cost due to its interest rates and accused the central bank of lagging the market after the bank decided against holding an extraordinary policy meeting to cut rates.

Turkey's banking watchdog seizes control of Gülenist Bank Asya

The Saving Deposit Insurance Fund (TMSF) has seized the Gülenist bank, Bank Asya, and shares belonging to 122 real and judicial shareholders of the bank, including Kaynak Holding, Ortado?u Tekstil and Forum ?n?aat, have been transferred to the TMSF. Some of the shareholders that have been deprived of their shareholding rights are known to be financers of the Gülenist Movement, such as Naci Tosun (Kaynak Holding's affiliate Sürat Bas?m), Ali Akbulut (Ortado?u Tekstil) and Forum ?n?aat. Officials said that the decision was not a political one but mainly due to Bank Asya's negligence to meet the technical requirements.

Unlawful intervention in Bank Asya to backfire on markets, experts warn

A midnight police raid on the headquarters of Turkey's largest Islamic bank after a banking watchdog's decision to take over the bank's management on Tuesday lacks legal grounds and will likely stir further speculation in financial markets, pundits warned. The bank vowed to take legal action in response to Tuesday's decision. Economists highlighted on Wednesday that intervention in the bank's board can only be temporary, because the bank cannot technically be seized unless depositors withdraw their money from Bank Asya. Early on Wednesday, loyal Bank Asya clients flocked to branches across Turkey to shore up the Islamic lender with new deposits.

Turkey’s Erdogan Exerts Power with Seizure of Bank Asya

Turkey’s banking regulator took control of Bank Asya, stepping up a year-long campaign against the Islamic lender a day after self-exiled Muslim cleric Fethullah Gulen criticized the government from his base in the U.S. The Savings Deposit Insurance Fund, or TMSF, the agency responsible for resolving failed banks, appointed a new chief executive officer and board of directors late Tuesday, the bank said in a filing. Its activities will continue without “any disruption” under the new management. The government’s move against Bank Asya has been expected for quite some time now. The timing of the Bank Asya move intends to minimize the damage of the decline in investor confidence.

State to fuel Islamic finance boom, Turkey banks chief says

New Islamic units of three state banks will accelerate Turkey’s plans to expand the share of Shari'ah-compliant assets, said Osman Akyuz, head of the country’s Islamic banking association. Akyuz foresees the country’s interest-free assets increasing by 30 per cent to $60 billion in 2015, up from 1.2 per cent growth in the 12 months through November. The association, which represents Turkey’s four Islamic banks, is also working to introduce new debt instruments, Akyuz said. Besides, the three state banks -- Ziraat Bank, Vakif Bank and Halkbank -- have pledged to quickly set up units for Shari'ah-compliant banking.

Bank Asya sold subsidiaries worth TL 568M within past year

While all of Bank Asya's partnership negotiations with foreign and local banks have failed within the past year, it has sold four of its subsidiaries and decided to increase its paid capital by 25 percent. Bank Asya first sold its 21.8 percent stake in Yeni Ma?azac?l?k A.?. (A101) worth TL 350 million ($152.2 million) on April 25, 2014, and then it sold its shares of Tuna GYO (Asya Termal) and Nil Yönetim Hizmetleri A.?. in July. Six months after these sales, Bank Asya is now selling its 40 percent share of Tamweel Africa Holding S.A. to the Islamic Corporation for the Development of the Private Sector (ICD). Therefore, the combined revenue earned is now TL 568 million when the last sale is included.

Turkey's Bank Asya to sell Senagal-based Tamweel Africa Holding stake

Turkey's Bank Asya said it was selling its 40 percent stake in Senegal-based Tamweel Africa Holding for 31.8 million euros ($37.7 million). Asya is selling the stake in Tamweel, which promotes Islamic finance in sub-Saharan Africa, to the Saudi-based Islamic Corporation for the Development of the Private Sector (ICD). The bank obtains 41.3 million lira profit through this sale and expects an positive impact on first quarter profitability, Cengiz Onder, Bank Asya's head of investor relations said. Besides, Bank Asya has laid off 1,708 staff and closed 80 branches, out of the 5,074 staff and 281 branches it had at the end of 2013.

Financiers provide Bank Asya TL 92 million for its recovery

TL 92 million ($396.46 million) has been collected from the financiers of the Gülen Movement for Bank Asya this week in order to fulfil the capital increase of Bank Asya. While some of the businessmen have previously refused any connection with the Gülen Movement, it became clear who their supporters were when the amount required for the capital increase of Bank Asya was collected without waiting for the approval of the Capital Market Board. Authorities from the Capital Market Board revealed that the bank's application for capital increase has not been confirmed yet. The board said the financial conditions of companies that will participate in the capital increase will also be investigated.

Turkey's Bank Asya sells Tamweel Africa Holding stake

Turkey's Bank Asya has signed a deal to sell its 40 percent stake in Tamweel Africa Holding to the Islamic Corporation for the Development of the Private Sector (ICD) for 31.8 million euro ($37.7 million). Bank Asya suffered a run on deposits last year as it became embroiled in a power struggle between now President Tayyip Erdogan and his former ally-turned-foe Fethullah Gulen, the Islamic cleric whose sympathisers founded the bank.

Bank Asya increases 25 pct capital for recovery

Bank Asya is planning on closing its debts by the revenues it will gain from the scheduled paid capital increase. The bank plans to increase its capital by 25 percent, from TL 900 million to TL 1.1 billion through rights issues. Out of the TL 225 million to be gained from the paid capital increases, TL 200 million will be used for the repayment of its loans to foreign financial institutions. The remaining TL 25 million will be used to cover the demands for the funding of its corporate, commercial, SME and personal customers.

Turkey's VakifBank eyes $300m loan for new Islamic bank

The board of directors of Turkey’s VakifBank’s has authorized a major loan procurement to set up an Islamic banking operation and confirmed that the bank’s general directorate office now has the authority to push ahead with the $300 million financing. The Turkish government wants to see the establishment of three Islamic banks as subsidiaries of the current state-run conventional banks by the end of 2015.

Turkiye Finans applies for 143 mln lira sukuk

Turkish Islamic lender Turkiye Finans Katilim Bankasi has applied to issue 143 million lira ($60.5 million) via sukuk. The sukuk will be issued through TF Varlik Kiralama, a wholly-owned unit of Turkiye Finans, which has a focus on loans to corporate clients. No tenor or details of underlying assets were given for the deal. Separately, the bank has also received regulatory approval for a 71 million lira sukuk for trailer manufacturer Tirsan Treyler Sanayi ve Ticaret.

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