September 19, 2014

Bank Asya shares recover despite Erdoğan's defamatory remark

After falling more than 50 percent since the beginning of this week, Bank Asya shares in the Borsa İstanbul (BİST) rallied on Thursday, rising over 10 percent in the first trading session, but the shares edged down again in the second session after President Recep Tayyip Erdoğan declared that private lender Bank Asya is “already bankrupt.”

Trading on shares of the bank was suspended by BİST following Erdoğan's remark.

“They say there are efforts being made to sink a bank. There is no work being done to sink a bank. This bank is already bankrupt. But they are trying to keep it afloat with a few buckets of water,” Erdoğan told a meeting of Turkey's largest business group, the Turkish Industrialists and Businessmen's Association (TÜSİAD), in İstanbul.

Trading on Bank Asya shares resumed on Monday -- following a five-week suspension -- and its share value has decreased by more than 40 percent since then. The shares rose for the first time since the trading resumed, increasing by 7.8 percent to TL 0.69.

Bank Asya Chief Executive Ahmet Beyaz said the bank was healthy and vowed to see off what he called a "smear campaign." The bank, he said, was meeting all of its obligations. He also suggested that attacks on his bank could sour foreign investors' view of Turkey.

Meanwhile Saudi Arabia renewed its contract with Bank Asya as part of this Saudi Export Program (SEP) that aims to boost the country's non-oil exports. The limit granted for the bank was raised 50 percent from $40 million to $60 million.

Published on Today's Zaman, 18 September 2014, Thursday