Pro-Gülen Islamic lender suffers 81 percent profit decline in second quarter

ISTANBUL

The lender, whose owners are known to be sympathizers of Gülen, posted a net profit of 10.6 million Turkish Lira ($4.9 million) in the second quarter, a slide of 81 percent from a year earlier.

Islamic lender Bank Asya, which has recently found itself at the center of tension between the government and Islamic scholar Fethullah Gülen, suffered a sharp downfall in its second quarter profit amid uncertainty over its future.

The lender, whose owners are known to be sympathizers of Gülen, posted a net profit of 10.6 million Turkish Lira ($4.9 million) in the second quarter, a slide of 81 percent from a year earlier.

The bank’s total profit decline for the first half of the year was 48.8 percent, making its non-consolidated profit 51.5 million liras for the six-month period.

The lender has been going through a whirlwind year of deposit withdrawals, acquisition talks and state contract annulments, due to the ongoing power struggle between the Justice and Development Party (AKP) government and Gülen’s supporters.

In the latest development, the lender announced on Aug. 8 that an exclusive deal with Qatar Islamic Bank (QIB) to acquire a stake in the Turkish lender was annulled, opening the way for alternative suitors.

Deputy Prime Minister Ali Babacan, the government’s top economic official, said on Aug. 6 that state-run Ziraat Bank, which is looking to launch its own Islamic banking unit, could buy Bank Asya, but an advisor to Prime Minister Tayyip Erdoğan, Yiğit Bulut, later denied such a plan. Babacan stood by his comments on Aug. 7, saying he had clearly explained developments regarding Bank Asya a day earlier and there was no new information.

The bank’s future looked dim after the authorities cancelled its tax collection and social security payment deals on Aug. 7 - a sign according to observers that the government may be a step closer to winding down the lender.

State-owned companies and institutional depositors loyal to Erdogan withdrew 4 billion liras ($1.8 billion), or some 20 percent of the bank’s deposits, earlier in the year, according to media reports.