State lender Ziraat considers acquiring pro-Gülen bank, deputy PM confirms

ISTANBUL

Bank Asya’s founders include Gülen sympathizers, a former ally of Erdoğan who has become his bitter rival, and state-owned companies and institutional depositors loyal to Erdoğan.

Deputy Prime Minister Ali Babacan has confirmed the state-owned Ziraat Bank is interested in buying Islamic lender Bank Asya, whose owners are known to have close ties with Islamic scholar Fethullah Gülen.

“Ziraat bank has begun talks with Bank Asya. These negotiations haven’t yet been finalized, but it would be an outcome we desire. If Ziraat Bank acquires Bank Asya, the state will have a participation bank,” Babacan said, during a live interview with the broadcaster Kanal 24.

Ziraat is one of the three state-owned banks planning to open up a participation bank that will offer interest-free financial services and according to Babacan the lender is considering acquiring Bank Asya instead of establishing a new bank from scratch.

As a result, Bank Asya’s shares increased following Babacan’s remarks, raising the lender’s stocks by nearly 5 percent during afternoon trading.

Daily Hürriyet columnist Erdal Sağlam had reported last month that Ziraat may be interested in buying Bank Asya as part of its plans to enter the Islamic banking sector.

Bank Asya said in March that it had started talks on a strategic partnership with Qatar Islamic Bank (QIB) and planned to complete the process soon, however several reports had claimed the talks ended without yielding any result. Despite these reports, Bank Asya claims the talks between the two are still ongoing.

Bank Asya’s founders include Gülen sympathizers, a former ally of Erdoğan who has become his bitter rival, and state-owned companies and institutional depositors loyal to Erdoğan withdrew 4 billion Turkish Liras ($1.8 billion), some 20 percent of the bank’s total deposits, according to Turkish media reports earlier this year.

The deputy prime minister also said the two other lenders, Vakıfbank and Halkbank, are continuing work to establish their own Islamic bank that operates in compliance with Islamic financial rules.

However, Babacan acknowledged that Halkbank is slightly behind schedule in this issue due to the management shuffles that have been taking place at the company since the beginning of the year, which included its CEO being changed.

Former Halkbank CEO Süleyman Arslan was arrested over bribery and corruption allegations as part of the Dec. 17, 2013 graft probe that shook the government. While in custody, Ali Fuat Taşkesenlioğlu replaced Arslan as head of the bank.