State-owned participation banks may be merged

ISTANBUL

Work is underway on a potential merger of Türkiye’s state-owned participation banks under a single umbrella, according to reports in the local media.

The move follows the successful consolidation of public insurance companies in 2020, which led to the establishment of Türkiye Sigorta.

Daily Sabah earlier reported that Ziraat Katılım, Vakıf Katılım and Halk Katılım — expected to begin operations in February after receiving approval from the Banking Regulation and Supervision Agency (BDDK) — could be brought together under a single umbrella.

The plan envisions the three banks being consolidated under the Türkiye Wealth Fund (TVF), operating as a single entity with a new name.

Sources cited by daily Hürriyet confirmed that a study on the merger is ongoing, though no final decision has yet been made.

Participation banks, often referred to as “interest-free banks” in Türkiye, have seen rising demand in recent years, increasing their share of the banking sector to around 10 percent of total volume.

Economic policymakers are said to be considering the merger as a way to expand the scale of operations and strengthen the sector’s competitiveness.