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Türkiye's sovereign wealth fund, Türkiye Wealth Fund (TWF), has signed agreements to acquire all shares in state-owned participation banks Ziraat Katilim and Halk Katilim, marking the first stage of a plan to bring the two institutions under one roof.
The agreements were signed on Oct. 7 through TVF Katilim Finans Yatirimlari A.S., a wholly owned subsidiary of TWF. The share transfers are targeted for completion by the end of 2026, subject to the necessary legal and regulatory approvals.
The fund has not disclosed the financial terms of the transactions or provided details on how the two banks will operate after the transfers.
The acquisitions aim to increase the capacity and competitiveness of state-owned participation finance institutions and expand the sector's share of Türkiye's financial markets, TWF said in its statement.
President Recep Tayyip Erdogan announced in June that the government plans to merge Ziraat Katilim, Vakif Katilim and Halk Katilim to create Türkiye's largest participation bank and strengthen the country's participation finance sector.
Erdogan described participation finance as a strategic component of Türkiye's economic development and financial stability. He also called it a fairer, safer financial model that could help develop the global financial system.
Participation banking operates under principles that prohibit interest-based transactions and instead uses structures such as profit-sharing arrangements and asset-backed financing.
Ziraat Katilim, which has been operating since May 2015, had total assets of ₺882.28 billion ($17.9 billion) at the end of 2025, with 3,140 employees and 227 branches, including two overseas locations, according to Ziraat Bank's annual report.
Halk Katilim, meanwhile, had total assets of ₺12.9 billion as of December 2025, according to Halkbank's annual report, although it had not yet commenced operations. The bank received regulatory approval in May 2025 and was formally registered in September 2025.
Türkiye's participation banking sector continues to expand, with total assets reaching ₺5.35 trillion in August 2026, up from ₺3.60 trillion at the end of 2025, according to data from the Participation Banks Association of Türkiye (TKBB).
The sector's share of total banking assets rises to 9.6%, from 8.6% at the end of 2025.
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