Duvar English / Reuters
The Treasury and Finance Ministry has fined two top banks Yapı Kredi and Akbank respectively 187.1 million Liras ($31.6 million) and 94.7 million Turkish Liras ($15.92 million) for violating an insurance law.
Shares of the banks slipped in response, with Yapı Kredi down 1.3 percent and Akbank off 1.7 percent early on Jan. 27.
Istanbul’s main finance index was down 1.1 percent on Jan. 27, after logging three straight down days last week as details emerged about a separate government probe into competition at Turkish lenders.
Yapı Kredi said in a statement to the Istanbul stock exchange on Jan. 27 it was fined and was warned that its insurance brokerage activity could be suspended for up to six months.
The bank was notified by the ministry of the violation in December but did not disclose it until it was notified of the final fine amount on Jan. 24, it said.
Akbank said on Jan. 25 it was fined 94.7 million liras and its insurance brokerage activity was suspended for 15 days to mid-February. It said the punishment would not have any “material impact” on its financial statements.
The law the banks violated prohibits sharing false information regarding companies’ services, actions that can harm clients, delaying compensation payments among some other details.
Both banks are using a 25 percent advance discount to pay the fines.
Economist Uğur Gürses, who also writes for Duvar English, said that the fines had stemmed from the government’s pressure on the banks for them to grant loans.
“There is a heavy pressure on the banks for them to grant loans. Starting from the Competition Authority, Ankara started to batter the banks, with ‘whatever it has.’ The economic crisis is a crisis of trust; you cannot solve it this way,” Gürses tweeted on Jan. 27.
Turkey’s Competition Authority said last week it was conducting “preliminary research” into banks, and sources said officials visited banks to analyse computers regarding the probe on trading in the financial sector.