Press Releases
print

IFC Investment in Turkey’s First Tier I Capital Bond Helps TEB Expand Banking Services


In Washington, DC:
Lotte Pang

IFC Communications Officer

Phone: +1 (202) 758 4290

E-mail:
lpang@ifc.org

In Belgrade:
Slobodan Brkic

IFC Communications Officer

Phone: +381 11 3023 750
E-mail:
sbrkic@ifc.org


Istanbul, August 2, 2007 — IFC, a member of the World Bank Group, today announced it has invested $100 million in Turkey’s first Tier I capital bond issued by Türk Ekonomi Bankası, one of the country’s leading commercial banks. The investment sets a precedent for the Turkish banking sector in using Tier I capital as a cost-effective source of funding and enables TEB to expand its lending to entrepreneurs and retail customers across Turkey.

The bond issued by TEB was privately placed with IFC and offers TEB the option to prepay the bond on its 10th anniversary or, if this option is not exercised, for the bond holder to convert the debt into equity.


Levent Celebioglu, Assistant General Manager for Financial Institutions at TEB, said, “TEB and IFC have played an important role in the financial sector by pioneering Turkey’s first-ever Tier I subordinated debt transaction. This follows on from 2002, when TEB and IFC opened the door to subordinated transactions by doing the first Tier II deal in Turkey. The new transaction strengthens TEB’s capital base and allows us to better serve our clients, particularly small and medium enterprises which today make up 50 percent of our portfolio.”

Shahbaz Mavaddat, IFC Director for Southern Europe and Central Asia, said, “We’re pleased to have been involved in this first-of-its-kind transaction in Turkey. The innovative structure demonstrates IFC's commitment to developing the region’s financial markets, improving access to finance, and meeting the needs of our clients in an effective way.”


Jyrki Koskelo, IFC Director for Global Financial Markets, added, “This transaction is consistent with IFC’s strategy of supporting well-managed Turkish financial institutions, particularly those with a focus on small and medium enterprises.”


IFC’s $1.4 billion portfolio in Turkey (as of June 2007) makes it the Corporation’s fifth-largest country exposure. In FY07, IFC committed over $550 million in new investments in Turkey, bringing its cumulative commitment to projects in the country since 1956 to $3.6 billion.


About IFC

IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing capital in the international financial markets, and providing advisory services to businesses and governments. IFC’s vision is that poor people have the opportunity to escape poverty and improve their lives. In FY06, IFC committed $8.3 billion, including syndications, to 284 investments in 66 developing countries. For more information, please visit
www.ifc.org.

About Türk Ekonomi Bankası

TEB emerged from the 1982 acquisition of Kocaeli Halk Bankasi by the Colakoglu Group. In February 2005, shares representing 50 percent of TEB Mali Yatırımlar A.Ş. were acquired by BNP Paribas. TEB Mali Yatırımlar A.Ş. owns 84.25 percent of the bank, and BNP Paribas and Colakoglu Group are indirect shareholders of the bank controlling 42.125 percent of its share capital each. While the bank maintains its strong market share in international trade and corporate banking, is expanding its market share in SME and retail businesses. TEB is rapidly expanding its network of branches as well, and its number of branches has reached to 235. The bank’s unconsolidated  total assets stand at $5.8 billion, and its shareholders’ equity is $0.39 billion as of 2006 year-end. Through subsidiaries that make up TEB Mali Yatırımlar A.Ş., TEB offers its customers leasing, factoring, non-life insurance, asset management, and investment brokerage services.