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Türkiye is reportedly exploring a merger of its three state-owned participation banks, Ziraat Katilim, Vakif Katilim, and the soon-to-be-launched Halk Katilim, into a single institution under the umbrella of the Türkiye Wealth Fund (TWF).
According to reports in Turkish media, the move is aimed at increasing operational efficiency, unifying branding, and scaling up Türkiye’s Islamic finance offerings to meet growing demand.
The proposed model would bring the banks together under a new name, according to columnist Dilek Gungor from the pro-government daily Sabah. The potential consolidation mirrors the earlier restructuring in the insurance sector that led to the creation of Türkiye Sigorta in 2020, bringing together Ziraat Sigorta, Halk Sigorta, and Gunes Sigorta. Türkiye Sigorta now holds ₺151.24 billion ($3.5 billion) in total assets, she pointed out.
The Banking Regulation and Supervision Agency (BDDK) recently granted an operating license to Halk Katilim, which is expected to begin operations in February.
With Ziraat Katilim and Vakif Katilim already active in the market, all three banks would be part of the consolidation plan currently under discussion by the country’s economic management team, Gungor suggested.
Participation banks in Türkiye operate according to Islamic finance principles, which prohibit the charging of interest.
As of October, Türkiye’s participation banking sector reported total assets of ₺3.91 trillion ($93.69 billion), marking a 27.3% year-over-year increase. The sector currently represents approximately 8.9% of the country’s total banking assets, according to the latest data from the Banking Regulation and Supervision Agency.
Ziraat Katilim holds ₺696.36 billion in assets, while Vakif Katilim accounts for ₺664.35 billion as of the third quarter’s end. Combined, the two already make up nearly one-third of Türkiye’s participation banking sector.
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