THE Islamic lending arm of Turkey’s state-run Vakifbank has applied to sell 500 million lira ($127.4 million) worth of Islamic bonds, or sukuk, according to a regulatory filing.
Unlisted lender Vakif Katilim started operations in February 2016 as part of wider efforts by the Turkish government to develop Islamic banking, known domestically as participation banking.
No tenor or details of underlying assets were given for the deal, which will be sold to qualified investors via an asset leasing company, according to Turkey’s Capital Markets Board.
Islamic banking has developed slowly in Turkey, partly because of political sensitivities and the secular nature of its laws, but the entry of government-backed lenders is gradually changing this.
Turkey’s state-run Ziraat Bank launched its own Islamic unit in 2015, joining privately owned Islamic lenders Albaraka Turk, Kuveyt Turk and Turkiye Finans.