Turkey merges three bailed-out banks, closes down fourth

Published June 17th, 2001 - 02:00 GMT

Turkey announced on Friday, June 15, that it will merge three bailed-out banks and close down a fourth one after the institutions failed to lure buyers as part of a drive to reform the ailing banking sector. 


The banking regulation and supervision board said Esbank and Interbank would be merged into Etibank by July 2 in an apparent move to make them more attractive to prospective buyers. 


The decision would not affect the banks' clients, a statement said. The board annuled the license of a fourth bailed-out bank, Turk Ticaret, as of July 1 after deciding that "there was no opportunity" to sell it despite costly rehabilitation efforts. 


Five other banks under the board's supervision have already been merged into a sixth one, Sumerbank. 


Turkey, hit by a severe financial crisis in February, has pledged to reform its crowded and weak banking sector as part of a tough economic program that received a multi-billion-dollar support from the International Monetary Fund (IMF) in May. 


A total of 13 troubled banks were under state supervision in May when Turkey announced they would be sold or dissolved by the end of 2001. 


The public banking sector has also undergone plans for rehabilitation. The banking sector, where widespread corruption and political favoritism contributed significantly to financial instability, is believed to be at the core of the economic crisis. —(AFP) 


© Agence France Presse 


© 2001 Mena Report (www.menareport.com)

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