Gov't says public bank mulls purchasing Bank Asya

Turkish deputy prime minister has said public bank Ziraat is considering to purchase Turkey's tenth biggest private bank in a move many interpreted as the authorities' latest salvo to crush the financial institution due to its links to the Gülen movement.

Observers speculate that the government now prefers to purchase the bank after numerous failed attempts to sink the bank earlier this year that will also help government weather any negative financial outcome due to eradicating the bank from the market.

Ali Babacan said in a televised interview on Wednesday that the government has already made its decision and that they're are currently working on pushing the public banks to purchase at least one Islamic bank.

Babacan said the government wanted state banks Ziraat, Halkbank and Vakıfbank to own Islamic lenders and that Ziraat would own an Islamic lender if it bought Bank Asya.

In an interview with Kanal 24 television, Babacan also said three news Islamic lenders would begin activities by the end of 2015 after regulations are made to establish such banks with Treasury capital.

"If Ziraat Bank purchases the Bank Asya, the public will have one Islamic bank," Babacan said, but tried to assuage fears that the government may illegally seize the bank. "Both sides should okay so that the purchase could proceed," Babacan said. He also added that Ziraat bank is currently holding talks with Bank Asya.

Bank Asya dismissed the remarks as "false" and said no such talks took place.

The minister's remarks came at a time when the government has been trying for months already to sink Bank Asya for its links to the Gülen movement. Turkish Islamic scholar Fethullah Gülen says authorities have designated the movement as a "scapegoat" and dismissed charges by Prime Minister Recep Tayyip Erdoğan that it is trying to topple the government. Erdoğan's public assault on the movement was largely seen as the government's attempt to contain embarrasing corruption scandal that implicated sons of ministers, several pro-government businessmen and former chief of the state bank.

Interior Minister Efkan Ala said a bank, referring to Bank Asya, had made $2 billion in profit after buying a large amount of US dollars when the greenback surged against the lira. All these allegations were refuted by the bank, which has published its currency transactions. The central bank has confirmed that the bank was not involved in any wrongdoing. Babacan also dismissed these claims.

Erdoğan recently said the bank has a liquidity problem and unfairly attracted investors through speculation. He also made defamatory statements against the bank many times and threatened to sink the bank that wooed away the investors. Main opposition Republican People's Party (CHP) Deputy Chairman Faik Öztrak accused the prime minister of violating a banking law by publicly defaming the financial institution.

Bank Asya bucked a fall in stocks, rising more than 4 percent, after Babacan's remarks.

Published on Today's Zaman, 06 August 2014, Wednesday

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