Turkish treasury to issue 3.7 bln euro debt to boost state lenders' capital (updated)

Turkiye Kalkinma ve Yatirim Bankasi

22/04/2019 14:49

(Recasts with treasury statement, adds details)
    ISTANBUL, April 22 (Reuters) - Turkey's Treasury will issue
5-year debt instruments worth a total of 3.7 billion euros to
strengthen the capital of state banks, it said on Monday.
    Last week, Turkish state-owned lenders Ziraat Bank and
Vakifbank said they had completed pricing of perpetual bonds,
which will be used to strengthen capital, while Kalkinma Bank
and Eximbank authorised headquarters to seek loans to boost
their capital.
    After last year's currency crisis - in which the lira
 TRYTOM=D3  shed around 30 percent of its value against the U.S.
dollar - Turkey's state banks began actively providing loan
restructurings to companies and spreading low-interest credit to
individuals as part of a broader government effort to stem the
damage.
    The government debt securities will be issued to the Market
Stability and Balance Fund (PIDF) owned by Turkey's Wealth Fund,
the treasury said, adding that the fund would sell the
securities to state lenders and in return buy banks' perpetual
bonds or provide loans to strengthen their capital.
    Around 38 percent of the total issuance, 1.4 billion euro,
will be used to strengthen the capital of state lender Ziraat
Bank, Turkey's largest bank by asset size, the treasury said.
    Earlier this month, Turkey pledged 28 billion lira to boost
the capital level of state banks and relieve bad debts in a
sector left reeling by last year's crisis, as the country moved
to revive an economy plagued by double digit inflation and
recession.  urn:newsml:reuters.com:*:nL8N21S25X
    Ziraat Bank said it had priced its Additional Tier 1 (AT1)
notes worth 1.4 billion euros, while Vakifbank  VAKBN.IS  said
pricing of its AT1 notes with a nominal value of 700 million
euro had been finalised on April 18.
    Economists have raised concern over a spike in the Turkish
banking sector's non-performing loan ratio. Finance Minister
Berat Albayrak said last week the ratio stands at around 4.2
percent and described it as "quite good."
    Last week, Halkbank  HALKB.IS  said it plans to issue debt
instruments or borrow in the Turkish market and abroad, to meet
its Additional Tier 1 (AT1) capital requirements.  urn:newsml:reuters.com:*:nL5N21Z2WI  
 
($1 = 0.8896 euros)

 (Reporting by Can Sezer and Tulay Karadeniz
Writing by Ezgi Erkoyun; 
Editing by Daren Butler)
 ((ezgi.erkoyun@thomsonreuters.com; +90-212-350 7051; Reuters
Messaging: ezgi.erkoyun.thomsonreuters.com@reuters.net;))