The Participation Banks Association of Turkey (TKBB) held its 11th ordinary general assembly meeting in Istanbul this month. Ali Babacan, the minister of state; deputy prime minister Erdem Başçı, the chairman of the central bank; and members of the Banking Regulation and Supervision Agency (BDDK) attended the meeting and commented on the growth of the Turkish participation bank sector.
Ali stated that in addition to their important role for the finance sector, participation banks are acting as intermediates for bringing into the banking sector sources which are not currently in the system. In this way participation banks help the Turkish banking sector to achieve steady growth and become less fragile.
Ali also commented on the potential sovereign Sukuk issuance by the treasury. He said that that the treasury’s Sukuk may be issued in Turkish lira for the domestic market. Local Turkish investor interest is quite high and the market itself is ready for the Sukuk issuance. In addition to the local investor interest, the government is especially targeting foreign investors.
For this reason the prospective Sukuk issuance will also be carried out in foreign currency to attract the investors from abroad to generating the inflow of money to Turkey. This issuance will probably be a successful one since the interest from the foreign investors has reached a remarkable level.
The Turkish participation banks’ current assets have reached to TLR56.1 billion (US$31.2 billion) which shows a 29% increase when compared to the previous year.
Additionally, the participation banks have strengthened their relations with foreign Islamic banks and the TKBB has also signed an MoU with the Association of Islamic Banking Institutions Malaysia to collaborate and to establish a basis of cooperation between Malaysia and Turkey to further promote the establishment, development, self-regulation and promotion of Islamic banking and Islamic capital and money markets on a global scale.
Russian Sberbank enters Turkish banking market with Denizbank acquisition
Russia’s top lender Sberbank has accomplished the biggest acquisition in its history. Sberbank has agreed to buy 99.85% of DenizBank from French-Belgian Dexia Group. Sberbank will pay US$3.5 billion for Denizbank, the fifth largest private bank in Turkey, as well as its subsidiaries in Russia and Austria. In a statement to the Istanbul Stock Exchange, Denizbank stated that the sale process is expected to be completed in the last quarter of 2012.
“For Turkey and Russia, the Sberbank-DenizBank partnership has a meaning beyond a bank acquisition. The fact that Sberbank is acquiring DenizBank’s shares will contribute a lot to the target of improving commercial relations between the two countries. I hope this share transfer agreement will be beneficial for all parties,” Hakan Ateş, CEO of DenizBank, said in Istanbul.
Denizbank has a considerable number of branches both in Turkey and abroad; 592 offices across Turkey and 15 branches abroad including Denizbank Moscow, Denizbank AG Austria and EuroDeniz located in the Turkish republic of northern Cyprus.
Sberbank was the only bidder for DenizBank, after the Qatar National Bank pulled out.
Ali Ceylan is a partner at Baspinar & Partners Law Firm. He can be contacted at
[email protected]
.