Turkey is said to weigh $3-bln capital injection for its state-owned banks amid coronavirus crisis

Turkey’s government is considering a capital injection worth 20 billion lira ($2.81 billion) for three state-owned banks -- Ziraat Bank, Halkbank and Vakıfbank -- so that they can provide loans to businesses hit by the coronavirus epidemic, two anonymous banking sources told Reuters.


Turkey aims to inject roughly 20 billion lira ($2.81 billion) of new capital into three state banks -- Ziraat Bank, Halkbank and Vakıfbank -- in coming days, two banking sources told Reuters on May 8.

Turkish banks have relatively high capital buffers, though state lenders generally hold less than their private peers. They are under increased pressure to lend in the face of the coronavirus pandemic that is tipping Turkey’s economy into what is expected to be its second recession in less than two years.

A spokesman for the Treasury did not immediately comment.

“We expect necessary regulation to be announced and published next week to increase capital of the state banks,” said one of the sources, both of whom requested anonymity.

“The capital increase will be at around the 5 to 7.5 billion lira level for each state bank, totalling about 20 billion lira,” the source said.

Halkbank stock was up around 2.5 percent and Vakifbank up 1.5 percent at 1400 GMT, while Istanbul’s main share index and banking index were each down 0.6 percent.

Analysts said the bank shares had been boosted by expectations of fresh capital. Ziraat is unlisted.