Turkey's Wealth Fund Becomes a Shareholder of State-Owned VakıfBank

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The Turkey Wealth Fund (TWF) has announced that it will raise the core capital of three state lenders.

"To strengthen capital structures and support adequacy of Ziraat Bank, Halkbank and VakıfBank, we have launched the necessary works to raise core capitals by a total of 21 billion Turkish liras [~ $3 billion]," the TWF said in a statement.

Turkey's sovereign wealth fund, established in 2016, holds all shares of Ziraat Bank and majority of Halkbank.

The move, in line with a mission to support stability and depth in financial markets, will pave the way for the fund to become also a shareholder of VakıfBank, the third-largest state bank of the country.

Lenders are aimed at maintaining their growth strategies in the coming period while becoming stronger against the impacts of the COVID-19 outbreak on the economy and fluctuations in the global market.

What is the Wealth Fund?

The Turkey Wealth Fund bill was submitted to the parliament on August 2, 2016. The fund was established under Law No. 6741 after the parliament passed the bill on August 26.

The stated purpose of the fund was to contribute the country's economy to overcome its structural problems. However, it caused controversy that the fund was exempted from taxation, would not have to abide by the laws on protecting natural and cultural assets and it would not be audited by the Court of Accounts.

Eleven state-owned companies was handed over to the fund: Ziraat Banka, BOTAŞ, PTT, TÜRKSAT, Turkish Petroleum Corporation, ETİ Maden, Türk Telekom, Halk Bankası, Turkish Airlines and Çaykur. (HA/VK)