March 4, 2015

S&P underlines Bank Asya takeover harbors potential political risks

Ratings agency Standard and Poor's said on Wednesday incidents surrounding Turkey's Bank Asya, which ended in its management takeover by regulators in early 2015, showed the potential for political risks to spill over into the financial system.

S&P also said a June parliamentary election should not pose a particular source of risk for Turkish banks.

Controversy continues in the aftermath of the politically-backed overhaul of 63 percent of the publicly traded Bank Asya's privileged shares early February. The takeover was perpetrated by the state owned Savings Deposit Insurance Fund (TMSF) on orders of the Banking Regulation and Supervision Agency (BDDK) who used a so-called lack of transparency and documentation regarding as a pretext.

The bank had long been a target of the Turkish President Recep Tayyip Erdoğan, who had personally demanded the BDDK to step, along with pro-government media speculative reporting in the past year.

Reuters news agency had made headlines in Turkish press in October when it had quoted an anonymous source with firsthand knowledge of the discussions concerning Bank Asya.

"Erdoğan was traveling when that happened," read the report. "He said he wanted Bank Asya's keys on his table when he came back."

Published on Today's Zaman, 04 March 2015, Wednesday