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IFC Boosts Turkey's Banking Sector With $85 Million Loan Facility to Leading Commercial Bank


IFC, Washington D.C.:

Afshin Molavi

Phone:  (202) 458-5674

Fax:  (202) 974-4384

E-mail:
 amolavi@ifc.org

IFC, Istanbul:        


Can Pamir                

Phone:  (90-212) 282-4001        

Fax:  (90-212) 282-4002        

E-mail:
cpamir@ifc.org


* IFC Chief Peter Woicke pledges strong support to Turkey’s private sector

* IFC’s post-financial crisis support of Turkish private sector nears $450 million


Istanbul, Turkey, July 17, 2002
—The International Finance Corporation (IFC), the private sector arm of the World Bank Group, has signed an agreement to provide a US$85 million financing facility to Turk Ekonomi Bankasi (TEB), one of Turkey’s leading commercial banks.  The facility consists of a $15 million long-term subordinated convertible loan and a $70 million medium-term loan facility to be lent as working capital, investment or for export pre-finance needs to TEB’s clients.  The latter consists of a $20 million loan for IFC’s own account, and allows for the syndication of up to $50 million from private commercial banks as and when markets recover.


IFC Chief Peter Woicke, who is currently visiting Istanbul, said: “IFC’s loan to TEB reflects our continued commitment to the Turkish financial sector at a time when restructuring efforts have gained considerable momentum in the country.  We believe that banks like TEB play a critical role in the long-term health of the Turkish economy.  A strong and a well-capitalized banking sector is a key to a stable economy and sustainable economic growth.” During his visit, Mr. Woicke also pledged to continue IFC’s strong support to Turkey’s private sector, which includes nearly $450 million in investments since Turkey’s financial crisis last year.


TEB emerged from the 1981 acquisition of Kocaeli Halk Bankasi by the Colakoglu Group—a major industrial and trading group in Turkey.  Characterized by a reputation for prudence and conservative management, TEB is now a mid-sized wholesale commercial bank with unconsolidated total assets of $1.1 billion equivalent and $125 million in shareholders’ equity as of 2001 year-end.  Through subsidiaries, TEB has expanded into other financial services—including leasing, factoring, asset management, insurance and brokerage, and offers a full menu of financial products to its customers.


Mr. Yavuz Canevi, the Chairman of TEB, said:  “This agreement is a remarkable event for the Turkish financial sector.  We are pleased to build on our strong relationship with the IFC and boost TEB’s capital adequacy ratio from 14 percent to 17 percent , which will give TEB the opportunity to provide increased support to the Turkish corporate sector.”


Khosrow Zamani, Director of IFC’s Southern Europe & Central Asia Department, said: “IFC’s financing to TEB fills an important need for long-term funding of Turkish banks.  This multi-faceted loan facility will allow TEB to further strengthen its balance sheet and give long-term support to Turkish businesses.”

 
Turkey, IFC’s fifth largest exposure, accounts for about 4.5 percent of IFC’s global portfolio.  IFC’s held portfolio in the country, including amounts mobilized from commercial banks, is close to $1.35 billion.


IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses. Since its founding in 1956, IFC has committed more than $31 billion of its own funds and arranged $20 billion in syndications for 2,636 companies in 140 developing countries. IFC’s committed portfolio at the end of FY01 was $14.3 billion.

TEB Financial Kiralama A.S.