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Erdogan Approves Third Capital Boost for Banks Since 2019

TURKEY
  • ERDOGAN APPROVES THIRD CAPITAL BOOST FOR STATE BANKS SINCE 2019
  • Turkish authorities plan to inject capital into state-owned banks to ensure they keep lending to businesses as the lira’s record drop erodes the lenders’ buffers
  • The exact size of the capital boost and its funding method are being ironed out by the Treasury and Finance Ministry following the final go-ahead by President Recep Tayyip Erdogan on Monday
  • Should the authorities proceed with the plan, it would be the third capital boost for state lenders in about three years. The sovereign wealth fund, which holds a majority stake in all three, injected $6.7 billion to support all state lenders in two separate rounds in 2019 and 2020.
  • Despite the injections, the average capital adequacy ratio of state-owned banks fell to 16% at the end of October from 18% at the end of 2019, according to data from the banking watchdog.
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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