Turkey

Albaraka Turk issues TRL 600 million dual-tranche #Sukuk

Albaraka Turk Katilim Bankasi has issued TRL 600 million dual-tranche Sukuk through its subsidiary Bereket Varl?k Kiralama Sirketi. While the targeted total amount of the issuance was TRL 450 million, the total amount reached TRL 600 million. The certificates had two different tenors as 98 days and 147 days and the size of each tranche was TRL 450 million and TRL 150 million respectively. Malek K. Temsah, Albaraka Turk’s Assistant General Manager of Treasury, said that the uniqueness of this transaction was in its dual-tenured nature, which offered investors additional flexibility.

MICROFINANCE PAPER WRAP-UP: “Analysis of the Strategy of #Microfinance for Financial Inclusion of Refugees,” published by the European Microfinance Network

Turkey is host to an estimated 4 million refugees, more than are living in any other country. This paper assesses “the feasibility of microfinance as an appropriate strategy for the financial inclusion of refugees in Turkey.” The authors identify some of the risks of lending to refugee populations and steps that can be taken to mitigate them. Borrowed funds may be used for unapproved purposes such as to repay other debts. This may be mitigated by visiting the borrower’s place of work to assess how the credit is to be used. Excluding local residents from lending programs can create resentment. This may be mitigated by issuing loans to groups whose members span both the local and refugee populations. Refugees may move away, making recovery of loan repayments more challenging. This can be mitigated by assessing a loan applicant’s level of integration into the local community.

KFH-Turkey... Robust Financial Position, Very High Liquidity Ratios

Group Chief Executive Officer at Kuwait Finance House(KFH), Mazin Saad Al-Nahedh, emphasized that KFH-Turkey enjoys robust financial position and very strong liquidity ratios as per the regulatory authority’s requirements in Turkey and Kuwait, not to mention as per the international standard Basel III.

Istanbul to host refugee economic inclusion conference

Istanbul is hosting a two-day conference to discuss the economic inclusion of young refugees in their host communities. The conference is set to bring together more than 150 stakeholders from the MENA region, policymakers, international and national NGOs, private sector, academia, and entrepreneurs. Participants will discuss various methods for enhancing economic inclusion of refugees and host communities in the Middle East and North Africa (MENA) region. The two-day program will be held in partnership between the Dutch International NGO Spark and Islamic Development Bank (IsDB), with the Islamic Solidarity Fund for Development (ISFD) and the Dutch Ministry of Foreign Affairs as sponsors.

#Turkey's Takasbank reveals blockchain platform to transfer gold

Turkey’s Takasbank launched its blockchain-based electronic platform for trading gold called BiGA. The project aims to enable people to transfer physical gold stored at the Borsa Istanbul Stock Exchange via digitized gold units on a blockchain. Although the units will have the same form and function as physically backed stablecoins, their value will be tied to the traded goal. The bank will provide users with a wallet to store the tokens, and BiGA can eventually be used as an e-commerce payment option. Notably, the word “BiGA” is the Turkish abbreviation for one gram of gold. Earlier this week, New York-based Paxos Trust Company has launched PAX Gold, a gold-backed Ethereum token, with approval from the New York State Department of Finance Services. One PAXG token will be supported by one fine troy ounce of London Good Delivery gold stored in professional vault facilities in London.

Istanbul meet discusses development challenges

The Islamic Development Bank (IsDB), the Islamic Solidarity Fund for Development (ISFD) and the United Nations Development Program (UNDP) have organised a two-day meeting in Istanbul. Several managers from organizer institutions are giving speeches on many issues such as saving children, poverty in Africa, socio-economic issues, Islamic and alternative finance, innovation and blockchain opportunities and partnership with the private sector. Gerd Trogemann, the manager of UNDP's Istanbul Regional Hub, stressed that all partners have to work together for bringing solutions to development challenges. The partners should go beyond organizational borders and build networks and platforms of partnerships, as each partner has different levels of reach, approaches and solutions.

#Turkey: Islamic economy institute to hold int'l studies

Turkey's first institute on Islamic economy and finance aims to conduct international academic studies in Istanbul. University president Erol Ozvar said the Marmara University Institute of Islamic Economics And Finance (MUISEF) will expand its studies with further academic research. MUISEF is the first of its kind in Turkey in terms of being an academic institute. Ozvar added that the instruction language will be in English and will provide training on Islamic economy and finance for graduate and doctoral students coming from different disciplines. The institute was established under a joint protocol with the Finance Office of the Turkish Presidency and serves the purpose of making Istanbul a "finance center".

Scientific heritage of Fuat Sezgin to be appreciated at symposium

The International Fuat Sezgin Islamic Science History Symposium will be organized in Instanbul from June 13 to June 15 with the theme of "Fuat Sezgin's Scientific Heritage." Various Islamic science history experts from all over the world will discuss both their works and the contributions of Fuat Sezgin to the world of science. Sezgin was one of the most respected historians of Islamic science and the recipient of the Presidential Culture and Art Grand Prize before his death last year at the age of 94. Studying Islamic sciences and Arabic at Istanbul University, Sezgin was expelled from the university after the 1960 military coup and worked in Germany as a visiting professor at the University of Frankfurt. In 1982, Sezgin founded the Institute for the Arabic-Islamic Sciences and established a museum showcasing over 800 copies of scientific tools. A similar museum named the Museum for the History of Science and Technology in Islam was opened in Istanbul in 2008 in Gülhane Park.

Turkish banks and investors disagree on bad loan talks

Turkish lenders disagreed on almost everything with potential investors when they met for the first round of talks about unloading a pile of bad loans. Investors demanded a 30% discount on the face value of the loans and an ownership stake, but the Turkish banks refused to write-off the loans and wanted to restructure them instead. While the government plans to carve out non-performing energy and real-estate loans, attendees disagreed so that some of the participants questioned whether there would even be more talks. Bank capital ratios are being squeezed after companies requested about $28 billion of debt-restructurings after a 28% plunge in the lira against the dollar last year.

Prominent Turkish bankers, businesspeople see no macroeconomic reason for currency volatility

For Turkey's bankers and businesspeople it has been impossible to explain the high volatility in the exchange rate over the past few weeks. The fundamentals of the Turkish economy are solid and macroeconomic indicators fail to account for the recent slide in the Turkish lira, which dropped by more than 40% since the beginning of this year. These fluctuations are seen as manipulations on the Turkish lira and economy, as part of an economic war waged against Turkey by U.S. President Donald Trump. The U.S. dollar tumbled nearly 5% against the Turkish lira on Tuesday. European shares rebounded Tuesday as the Turkish currency firmed. The Central Bank introduced measures on the Turkish lira and the foreign exchange market (FX) liquidity management. The bank said it would provide all the liquidity needed by banks and closely monitor markets and prices, while raising collateral FX deposit limits for lenders' lira transactions from 7.2 billion euros ($8.2 billion) to 20 billion euros.

#Bahrain's Bank Alkhair sells stake in Turkish investment firm

Bahrain’s Bank Alkhair has sold its majority stake in Turkish investment firm Alkhair Capital, as the lender exits some markets. Bank Alkhair entered the Turkish market a decade ago, acquiring an initial 75% stake in the investment firm. The bank has faced a challenging business environment over the past year and is currently streamlining its business lines. Additionally, the bank sold its stake in Pakistani lender Burj Bank and in 2017 the firm upgraded its business licence in the UAE and expanded its capital markets business in Saudi Arabia in a bid to focus on other markets. Now Bank Alkhair has received approval to transfer its 95.79% stake in Alkhair Capital to Ankara-based A1 Capital. The value of the transaction was not disclosed.

RAM Ratings: #Turkey rating downgrade triggers Kuveyt Turk downgrade

RAM Ratings has downgraded Kuveyt Turk's long-term rating to A1/Stable from AA3/Negative. The rating of KT Kira Sertifikalari Varlik Kiralama’s RM2.0 billion Islamic MTN Programme (2015/2025) has been revised downwards to A1(s)/Stable from AA3(s)/Negative. The Bank’s short-term financial institution rating remains unchanged at P1. The rating actions were triggered by the downgrade of Turkey’s sovereign ratings to gBB2(pi)/Stable/gNP(pi) from gBBB3(pi)/Negative/gP3(pi), due to an erosion of the country’s fiscal discipline. Kuveyt Turk has a relatively favourable funding profile, with a moderate reliance on market-based funding compared to the industry norm. The bank’s customer deposit base is well diversified. The bank’s liquidity profile is robust, with an average liquidity coverage ratio of 230% in fiscal year 2017.

#Turkey holds great potential for Islamic finance

According to Abdelilah Belatik, secretary general of the General Council for Islamic Banks and Financial Institutions (CIBAFI), Turkey's potential for Islamic banks is very big. Turkey has three participation banks, Al Baraka, Kuwait Turk, and Turkiye Finans, which are operating overseas already. Turkey's Banking Regulation and Supervision Agency (BDDK) started developing comprehensive regulations for participation banks. Belatik said countries like Bahrain and Malaysia have developed their entire system of infrastructure for Islamic finance, which is very important for the development of the industry. This year, CIBAFI chose Turkey to host its annual Global Forum. The Forum is focusing on how the industry will fulfill its obligations while remaining competitive and relevant within global financial markets.

Islamic Development Bank finalizing 4-year investment plan with #Turkey

The Islamic Development Bank (IsDB) is working on finalizing a four-year partnership strategy plan with Turkey. Walid Abdelwahab said the IDB aims to invest in various sectors that will fuel growth, such as infrastructure, energy, transportation and education. He said the bank aims to support value chain development in Turkey to enable the country to become more competitive through linking it with global value chains. He added that the bank appreciates Turkey's experience with high-speed railways. IsDB is preparing a documentary on this topic for other member countries of the Group that are interested in this technology.

Al Baraka Turk to exercise call option on $200m #sukuk

Albaraka Türk Participation Bank has sent a notice of redemption to its certificate holders on 06 April 2018 for its US$200,000,000 outstanding sukuk. Albaraka General Manager Meliksah Utku said the early redemption of the sukuk before its maturity in 2023 reflects the bank's partnership-centric approach to sukuk investors. The redemption date of the sukuk will be 07 May 2018 and will be redeemed at the aggregate of the outstanding face amount plus accrued but unpaid periodic distribution. Issued in May 2013 as a Tier 2 subordinated and USD-denominated sukuk al murabaha, the certificates were rated CCC+ by S&P and carried a coupon of 7.75% per annum.

Islamic bank to meet business world in Izmir this month

Turkey's Aegean province of Izmir will host an Islamic Development Bank Group (IDB) event between 26-27 April. The announcement was made by Turk Eximbank CEO Adnan Yildirim, who said that Turkey aims to boost trade relations with the IDB's 57 member countries. He added that Turk Eximbank wants to raise Islamic countries' 10% share of world trade to 20%. Turkey's current trade with IDB member countries is around $45 billion and the bank hopes to raise it to $100 billion within 10 years. Turk Eximbank aims to double its support to companies in IDB member countries. The lender ranks second globally after South Korea's Eximbank in terms of financing exports.

Turkiye Finans gets regulatory nod for $450 mln #sukuk

Turkish Islamic lender Turkiye Finans has been granted regulatory approval to raise $450 million via dollar-denominated sukuk. It previously issued dollar-denominated sukuk in 2013, a $500 million five-year deal that matures in May. The bank has been a frequent issuer of sukuk in the domestic market and has also tapped investors in Malaysia through ringgit-denominated deals.

'#Turkey can play a leading role in Islamic finance'

According to Abdelilah Belatik, secretary-general of the General Council for Islamic Banks and Financial Institutions (CIBAFI), Turkey can play a leading role in Islamic finance. Belatik sees Turkey as a bridge between the Muslim world and the West. He said through Turkey's support Islamic finance was discussed among G20 countries, which was a milestone. Belatik added that Turkey had a key role to play in raising awareness about Islamic finance. CIBAFI expects the volume of the sector to reach $4 trillion by the end of 2020.

#Kuwait Finance House to split shareholding of Turkish asset manager

Kuwait Finance House (KFH) will divide the ownership structure of its Turkish asset management firm between local and Kuwaiti units, as the Islamic lender continues to build on its Turkey franchise. KT Asset Management will transfer 5 million shares representing a 50% stake to KFH Capital. Both Kuveyt Turk and KFH Capital are subsidiaries of KFH. KFH Capital is the main investment arm of KFH, which has restructured activities in recent years to streamline operations and focus on growth markets such as Turkey.

Is bitcoin permissible in Islam? Muslims disregard clerics’ warnings and invest

#Turkey has witnessed a rise in interest in bitcoin and the hundreds of other cryptocurrencies that have been modeled on it. Bitcoin trade here has gone from about 9,000 transactions a month in May 2017 to 42,000 in December 2017. A handful of companies in construction, education and the food industry have begun accepting cryptocurrencies for payment. The value of bitcoin and other cryptocurrencies fluctuates widely, leading some to caution against investment. Diyanet, Turkey’s religious affairs directorate, said in December that bitcoin and Ethereum had no intrinsic value like gold, nor were they backed by a government, so they did not meet the standards of reliability to make them a currency. Another ruling in January said the factors driving the value of cryptocurrencies were too shrouded in secrecy, exposing investors to fraud and use by criminal networks. According to Onur Baran Caglar, a FinTech consultant and lecturer at Istanbul Aydin University, the debate over bitcoin misses the real potential of the underlying technology. That real potential is the blockchain, a digital ledger that keeps track of all bitcoin transactions worldwide.

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