Halkbank’s plans to establish an Islamic lender postponed: CEO

ISTANBUL - Reuters

The chief of Turkey’s state-run Halkbank has said the bank’s plans to establish an Islamic lender have been postponed “for judicial reasons,” adding that the management is now working on another formula that does not require equity raising.  

“Our bank’s efforts to set up an Islamic lender have been postponed for judicial reasons. We are now working on another formula that does not require any capital raising,” CEO Ali Fuat Taşkesenlioğlu told Reuters on Oct. 19. 

Halkbank has withdrawn its application to set up an Islamic lender, the bank said in a statement on Oct. 15.

It asked the Banking Regulation and Supervision Agency (BDDK) to cancel its previous application to establish a participation bank, the statement said, underlining that the bank may revisit the plans in the future. The lender, however, did not name any reason for the move. 

According to the existing law, $300 million of equity is a must for the establishment of a lender in Turkey. 

There are currently four Islamic banks, dubbed “participation banks,” operating in Turkey: Albaraka Türk, Bank Asya, Kuveyt Türk and Türkiye Finans. Ziraat became the fifth bank entering into the sector as of May.