Turkey plans to inject ,5 51.5 billion ($ 3.8 billion) into state-owned banks to ensure they continue to lend to businesses, following a record drop in the pound that hit their reserves.
The state fund will support the core capital of TC Ziraat Bankası, Turkiye Halk Bankası, Turkiye Vakıflar Bankası, as well as their Islamic banking subsidiaries, a senior official with direct knowledge of the matter told Bloomberg.
Under the current plan, Ziraat will receive ,5 22.5 billion, while Halkbank and Vakıfbank will receive ,5 13.5 billion each, the official said.
Islamic subsidiaries will receive a total of. 2 billion.
Following the news, the share of Halkbank increased by 3.9% while that of Vakifbank by 3.3%.
The fall of the pound and an attempt by state-owned banks to keep the cost of loans low have hit their cash reserves, requiring the government to inject capital for a third time in three years.
Turkiye Varlık Fonu, the investment fund known as TFW, holds the majority stake in all three state-owned banks.
It has channeled $ 6.7 billion to support banks, in two separate cycles in 2019 and 2020.
The fund financed previous cash contributions through the sale of bonds by the finance ministry to banks in the local market.
Despite the injections, the average capital adequacy ratio of state-owned banks fell to 16% at the end of November from 18% at the end of 2019.
Source From: Capital
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