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www.islamicfi nancenews.com<br />
<strong>Islamic</strong> <strong>Finance</strong> news Guide 2008<br />
Marking the Next Phase: Innovation (<strong>continued</strong>...)<br />
Kuveyt Türk and Bank Asya became members of the Istanbul<br />
Gold Exchange in 2007 and Türkiye Finans announced a<br />
project budget of US$5 million for microfi nance. With all the<br />
liquidity at hand, more creativity and progress in product<br />
development can be expected, more branches proliferating<br />
Turkey and, who knows, maybe even international expansion.<br />
Sukuk<br />
The long-awaited Sukuk regulations have not yet been issued,<br />
though lobbying behind the scenes goes on. Recently, the<br />
sector has also started to more openly suggest the need for<br />
those new products. Still, in December 2007, the secretarygeneral<br />
of the Association of Turkish Participation Banks,<br />
Osman Akyüz, made a strong case for the need to issue a<br />
fi nancial instrument called a “leasing certifi cate” (Sukuk<br />
Ijarah) in order to attract more investments from the Gulf<br />
region. He pointed out that the Turkish Treasury is working<br />
on it, and if they (the treasury) would take some pioneering<br />
steps, attracting additional funds could well be a possibility.<br />
“The long-awaited Sukuk<br />
regulations have not yet been<br />
issued, though lobbying behind<br />
the scenes goes on. Recently, the<br />
sector has also started to more<br />
openly suggest the need for new<br />
products.”<br />
In an interview in December 2007, Ufak Uyan (CEO of Kuveyt<br />
Türk) confi rmed that because of the high capital defi cit, Turkey<br />
would need a yearly capital infl ow of around US$40 billion<br />
to US$50 billion, and therefore it should prepare the legal<br />
grounds for issuing Sukuk. The Capital Markets Board SPK<br />
would have a particularly large responsibility on this issue.<br />
And in the special edition of Todays Zaman for the “Banking in<br />
Turkey” Conference (London, November 2007), Yunus Nacar<br />
(CEO of Türkiye Finans) confi rmed “participation banks in<br />
Turkey need an alternative instrument for investing the gains<br />
and these are what the Treasury calls ‘Sukuk paper’... The<br />
projects in this fi eld should be fi nalized as soon as possible”.<br />
The participation banks are not asking for these instruments<br />
in order to shelve them. For some time now, interested parties<br />
have been waiting to bring liquidities to the Turkish economy,<br />
provided that a sound regulatory and tax environment is in<br />
place.<br />
Participation Banks<br />
Albaraka Türk<br />
With regard to Albaraka Türk’s IPO in June 2007, 20.57%<br />
of the stock was opened to the public and the transaction<br />
generated a net profi t of approximately US$170 million.<br />
Domestic demand was 60.4 times over its value, while foreign<br />
demand reached 21.3 times above the expectations. Total<br />
demand for the Albaraka Türk IPO was 32 times above the<br />
allotment.<br />
At the opening of a new branch offi ce in Mersin last November,<br />
Adnan Büyükdeniz (CEO of Albaraka Türk) stated correctly<br />
that half of the (young) population of Turkey do not as yet have<br />
suffi cient access to banking services. This situation offers<br />
substantial growth potential for individual banking services<br />
such as loans for vehicles, housing and durable goods as well<br />
as credit cards. When these services become more accessible<br />
to a larger part of that population, they will bring considerable<br />
positive advancements in the banking business.<br />
Bank Asya<br />
In April 2007, Bank Asya closed a US$175 million syndicated<br />
Murabahah fi nancing facility with strong support from both<br />
regional and international banks. The facility was structured<br />
as a dual one- and two-year tranche facility, with proceeds<br />
going towards the bank’s general fi nancing activities. ABC <strong>Islamic</strong><br />
Bank, Standard Chartered Bank and Unicredit Markets<br />
& Investment Banking (acting through Bayerische Hypo-und<br />
Vereinsbank) were the deal’s mandated lead arrangers. More<br />
such arrangements are in the pipeline.<br />
That same month, Bank Asya CEO Unal Kabaca confi rmed<br />
management was looking at expansion opportunities abroad,<br />
such as buying a bank or opening an offi ce or branch, with an<br />
eye on neighboring countries and wherever Turkish fi rms do<br />
business.<br />
Kuveyt Türk<br />
Already in May 2007, Kuveyt Türk had raised their capital by<br />
30% (from YTL 200 million up to YTL 260 million).<br />
Late December, it was fi nally confi rmed that they are planning<br />
an IPO in the fi rst quarter of 2008. Kuveyt Türk has applied to<br />
the Capital Markets Board SPK to go public and list up to 20%<br />
of its shares, worth approximately YTL 57.2 million.<br />
This year will be an important year for Kuveyt Türk. Management<br />
plans to increase the number of branches. To this end,<br />
they announced the forthcoming opening of a branch in Dubai<br />
in addition to their offi ce in Bahrain to mediate investment<br />
relations between the Gulf region and Turkey. The impressive<br />
<strong>continued</strong>...<br />
Page 85
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