Turkey mulls injecting nearly $3 billion of new capital into state-run banks: report

0
(PHOTO: AFP)

Turkey plans to inject about 20 billion lira ($2.8 billion) of new capital into three state banks — Ziraat Bank, Halkbank and Vakıfbank — in the coming days, two banking sources told Reuters on Friday.

Turkish banks are under increased pressure to lend in the face of the coronavirus pandemic that is tipping the nation’s economy into what is expected to be its second recession in less than two years. State lenders generally have smaller capital buffers than their private peers.

“We expect the necessary regulation to be announced and published next week to increase the capital of state banks,” said one of the sources, both of whom requested anonymity.

“The capital increase will be around the 5 billion to 7.5 billion lira level for each state bank, totaling about 20 billion lira.”

Finance Minister Berat Albayrak told investors on Wednesday that Turkey would soon announce details of a plan to raise state banks’ core capital, according to two people on the conference call.

Albayrak said Turkey was “totally committed to supporting our state banks,” one of the people said.

Turkey, which has imposed a partial lockdown to curb the pandemic, has offered Treasury-backed loans for companies hit by the economic fallout from the coronavirus crisis, while state banks distributed consumer loans with deferred payments.

Liked it? Take a second to support Turkish Minute on Patreon!

LEAVE A REPLY