Turkey to Merge Three Participation Banks, President Erdoğan Announces

Turkish President Recep Tayyip Erdoğan announced a significant consolidation in the country's participation finance sector, revealing plans to merge three state-owned participation banks: Ziraat Katılım, Vakıf Katılım, and Halk Katılım. The announcement came during Erdoğan's address at the 3rd World Islamic Economy Summit held at the Istanbul Finance Center.

Erdoğan highlighted the growing presence of participation finance institutions in Turkey, noting that their share in the overall financial sector has reached 9.5%. He also pointed to the expansion of Sukuk (Islamic bond) issuances, which amounted to TL 614 billion last year. Of this total, 64% was issued by the Turkish Treasury and Ministry of Finance, while the remaining 36% came from participation banks and the real sector.

Further plans for the sector include the targeted initial public offering (IPO) of Emlak Katılım. Erdoğan recalled that Emlak Bankası was transformed into Emlak Katılım in 2018, and it has since become a key player in the system. The government continues its efforts to develop the interest-free financial system and promote participation finance instruments.

The merger is expected to create a larger, more competitive entity within Turkey's growing Islamic finance market, aligning with the government's broader economic goals for the sector.