Page 77 - TURKRptMay19

8.1.5 NIMs & CARs
8.1.7 Banks specific issues
Turkey’s Treasury to issue 5-year debt instruments worth €3.7bn to boost capital of state banks and state Islamic lenders. Turkey’s Treasury said on April 22 it is to issue 5-year debt instruments worth a total of €3.7bn to bolster the capital of state banks and state Islamic lenders. The government debt securities will be issued to the Market Stability and Balance Fund (PIDF), it added. The fund will sell the securities to public lenders and buy back bank bonds and provide loans to strengthen their capital. Late on April 19, Turkish state-owned lenders Ziraat Bank and Vakifbank completed pricing of perpetual bonds worth a total €2.1bn, using a tool to strengthen capital. Ziraat Bank, Turkey’s largest bank by asset size, has priced its Additional Tier 1 (AT1) notes worth 1.4 billion euros, the bank said in a stock exchange filing.
Earlier in April, Turkey pledged Turkish lira (TRY) 28bn to boost the capital level of state banks and relieve bad debts . The Turkish state banks were hit hard by last year’s currency crisis, while Turkey sank into a recession. They began actively providing loan restructurings to companies and spreading low-interest credit to individuals as part of a broader government effort to stem the damage. Vakifbank said pricing of its AT1 notes with a nominal value of €700mn was finalised on April 18. Public lender Halkbank said it planned to issue debt instruments or borrow in the Turkish market and abroad, to meet its Additional Tier 1 (AT1) capital requirements. Turkey’s Kalkinma Bank and Eximbank authorised headquarters to secure loans to support capital last week.
Shares in Turkish state-owned banks rally on news of capital injection. Shares in state-owned lenders Vakif and Halkbank rose 3.7% and 3.2%, respectively, after reports on April 9 that the government plans to shore up public lenders by injecting capital against a backdrop in which the country’s economy is expected to contract this year. The main stock exchange index, the
77 TURKEY Country Report May 2019 www.intellinews.com