IslamicFinance.de

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.