Turkey's state-run Ziraat Bank has rejected allegations of misconduct undertaken by its Germany subsidiary based in Frankfurt.
In a statement released on Aug. 31, Ziraat Bank said news reports alleging discrepancies in activities of Ziraat Bank International AG with regards to loans and collection of deposits were “baseless and did not reflect the truth.”
The bank also refuted reports that Germany’s financial watchdog BaFin had imposed penalties on Ziraat Bank International AG in the country.
“The process that is conducted routinely in the [German] banking sector also continues in our Ziraat Bank International Ag subsidiary, and contrary to the allegations, there is no yet finalized a sanction decision,” the bank said.
Germany's banking authority on Aug. 26 announced a series of punitive measures against an unnamed bank, which media reports later identified as Ziraat Bank International AG.
BaFin named four measures it had taken against the unnamed financial institution over a period of ten months beginning last November.
Two days later on Aug 28, the Turkish daily Sözcü reported that the bank that BaFin was referring to with “unprecedented bans, restrictions, and fines … that amount to shuttering the bank” is Ziraat Bank International AG.
In July, citing three sources, Reuters reported that BaFin was in talks with Ziraat Bank International AG “over concerns about some loan transactions and the bank’s balance sheet.”
“BaFin may prohibit the bank from making large-scale loans, send a special inspector to review what has been done, or limit the bank’s few business areas,” Reuters quoted the sources as saying.