Core capitals of state-owned banks will be increased with a total of TL 21 billionMay 11th, 2020
In accordance with the New Economy Program of the Ministry of Treasury and Finance and as per our mandate to reinforce the improvement and deepening of financial markets in Turkey, we had announced in April 2019 that Turkey Wealth Fund (TWF) had allocated EUR 3.7 billion Tier-1 capital to state-owned banks through its Market Stability and Balance Fund.
With the aim of strengthening the capital structures and adequacy of state-owned banks, we have started the process of increasing the core capitals of Ziraat Bank, Halkbank and VakıfBank with a total of TL 21 billion.
TWF already owns 100% of Ziraat Bank and is the major shareholder at Halkbank. As a result of this investment, TWF will also become a shareholder at VakıfBank and the synergy between these institutions will be enhanced. The state-owned banks have a critical role to support the economic and financial stability in Turkey and they will become stronger against the negative impacts of COVID-19 which has been stressing the global economic and financial system.
Republic of Turkey Ministry of Treasury and Finance will issue debt securities as private placement to Turkey Wealth Fund. The state-owned banks will purchase these debt securities from Turkey Wealth Fund at market price and the cash generated from the purchase will be used for capital injection. Details of the transactions have been provided within the Public Disclosure Platform announcements of Halkbank and VakıfBank.