Page 71 - TURKRptJun19

8.1.8 Banks news
Turkish state lender Ziraat Bank recorded a net profit of Turkish lira (TRY) 1.1bn ($182mn) in the first quarter, 36.3% less than it posted a year ago, it said in a filing on the Istanbul stock exchange. The bank is presently caught up in a controversy over how state banks are selling billions of dollars to curb the latest bout of depreciation of the TRY. Ziraat, Turkey’s largest lender by assets, is also under scrutiny over claims that the Turkish taxpayer seems certain to ultimately pick up losses incurred by Turkey’s construction sector amid the country’s economic crisis. Turkey’s public lenders have been recapitalised with an injection of €3.7bn by the Treasury, gearing them up for new rescue operations. The first such operation aims to salvage the debt- ridden construction sector by clearing bad assets. Turkey’s Capital Markets Board announced on April 18 that it had approved the creation of a Brand Real Estate Investment Fund by Ziraat Portfoy, a subsidiary of Ziraat Bank. Pro- government daily Sabah said on April 29 that the fund would have a capital of TRY5bn and take over unsold residential and commercial properties in the hands of companies from the Association of Housing Developers and Investors, which produce so-called brand projects. Critics say the fund seems destined to go into the red, with the prospect that the losses will drive up the public debt.
EBRD signs €50mn risk-sharing facility with TSKB. The European Bank for Reconstruction and Development (EBRD) is extending a risk-sharing facility of up to €50mn to Turkiye Sinai Kalkinma Bankasi (Industrial Development Bank of Turkey, or TSKB). Together with TSKB resources, lending to private industrial companies under the facility will amount to a total of €100mn. Under an agreement signed in Istanbul on May 28, the EBRD will share the risk of up to 50% of each individual sub-loan provided to eligible businesses identified jointly by the two lenders. Clients can use the loans to finance working capital, capital expenditure and refinancing existing loans. The financing comes as bank lending in Turkey remains constrained by economic vulnerabilities. “The EBRD remains committed to Turkey at this critical time when the capacity of banks to lend is restricted. This [restriction] is likely to slow down the country’s economic recovery,” Jurgen Rigterink, EBRD First Vice President said. He noted that the EBRD expected the Turkish economy would start to pick up by 2020. The EBRD is a leading institutional investor in Turkey and has invested over €11bn in more than 280 projects in the country since 2009. The overwhelming majority of EBRD investments in Turkey are in the private sector.
Turkey’s banking watchdog approves establishment of new investment bank. Turkey’s banking sector regulator BDDK has approved the
71 TURKEY Country Report June 2019 www.intellinews.com