State bank Ziraat announces end of acquisition talks with pro-Gülen lender

ISTANBUL

Bank Asya has been going through a whirlwind year of deposit withdrawals, acquisition talks and state contract annulments, due to the ongoing power struggle between the AKP government and Gülen’s supporters. REUTERS Photo

State-run lender Ziraat Bank announced it has ended unofficial acquisition talks with Islamic lender Bank Asya, citing inconsistency with its priorities.

After weeks of rumors, Deputy Prime Minister Ali Babacan had confirmed on Aug. 6 the state-owned lender was interested in buying Bank Asya, whose owners are known to have close ties with Islamic scholar Fethullah Gülen, as part of its plans to enter the Islamic banking sector.

In a statement sent to Public Disclosure Platform (KAP) on Aug. 21, Ziraat disclosed “it decided not to begin official acquisition negotiations after concluding it is not consistent with the lender’s priorities at this point and to end talks as of today [Aug. 21].”

Last week, Turkey’s main stock exchange, Borsa Istanbul, had suspended trading Bank Asya’s shares “until uncertainty regarding its ownership is resolved.”

Ziraat is one of the three state-owned banks planning to open up a participation bank that will offer interest-free financial services and the lender considered acquiring Bank Asya instead of establishing a new bank from scratch.

After Babacan’s confirmation of rumored talks, President-elect Recep Tayyip Erdoğan’s chief economy adviser Yiğit Bulut had puzzled the markets by denying the presence of such plans “within the [then-]prime minister’s knowledge.”

Bank Asya has been going through a whirlwind year of deposit withdrawals, acquisition talks and state contract annulments, due to the ongoing power struggle between the Justice and Development Party (AKP) government and Gülen’s supporters.

The lender had also attempted earlier this year to form a partnership with Qatar Islamic Bank (QIB), but that initiative also ended with failure, as on Aug. 8 it announced annulling talks with the QIB.