Istanbul, Turkey, October 1, 2003
—The International Finance Corporation, the private sector arm of the World Bank Group, has signed an agreement to provide a $100 million financing facility to Akbank, the oldest and largest private sector bank in Turkey. The facility consists of a $100 million syndicated loan, or B-loan, in which 14 commercial banks have participated. IFC also provided from its own account a direct long-term project finance facility for $55 million that was arranged previously. With the addition of a bond offering in international markets that IFC has yet to launch, the IFC facility is expected to reach $200–260 million when all financing is completed.
IFC’s participation in this transaction provided the risk mitigation necessary to attract banks to longer-term financing in Turkey. “This transaction is very significant for Turkey since it is the first time a domestic financial institution has received an unsecured syndicated loan with a tenor exceeding one year since another IFC transaction was completed in March 2000,” said IFC Vice President, Finance, Nina Shapiro. “This syndication, which was oversubscribed by 100 percent, shows how B-loans can be effective in different situations.”
IFC is committed to supporting Turkish financial institutions at a time when key sector reforms are beginning to take root and gaining wider acceptance in the international community. “This facility will bring much needed long-term resources to Turkish private sector firms and underscores the renewed confidence that prime international banks have for well-managed Turkish banks,” said Khosrow Zamani, IFC director of the Southern Europe and Central Asia Department.
Zafer Kurtul, the chief executive officer of Akbank called the new agreement “a key step in promoting Turkish risk with participant banks for tenors exceeding those that could be raised by Turkish financial institutions in international markets.” He added, “It also underlines the close cooperation that has developed between IFC and Akbank. In this economically challenging environment, Akbank was able to navigate the contractions in the Turkish banking sector to emerge as the number one bank in Turkey.”
The banks that are participating in the B-loan are:
Co-Arranger
Bayerische Hypovereinsbank
Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO)
Gulf International Bank B.S.C.
National Bank of Kuwait SAK
Standard Chartered Bank
Manager
Anglo Irish Bank
Banco Atlántico, S.A.
BayernLB
Landesbank Rheinland-Pfalz-Girozentrale
Natexis Banques Populaires
Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank)
State Bank of India
Participant
Banco Espirito Santo, S.A.
BRE Bank SA
Akbank was established in 1948 by Haci Omer Sabanci, the founder of the Sabanci Group. Currently, Akbank is the largest private sector bank in Turkey in terms of shareholders’ equity, loan portfolio, and total deposits. As of the first half of the year, the bank had total assets of $16.8 billion equivalent, total deposits of $11.5 billion equivalent and shareholders’ equity of $2.7 billion equivalent. With a capital adequacy ratio of 43.5 percent, Akbank is the best capitalized bank in Turkey.
Turkey, IFC’s third largest country exposure, accounts for about 5 percent of IFC’s global portfolio. IFC’s portfolio in the country, including amounts mobilized from commercial banks, is $844 million.
The mission of IFC 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, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY03 was $16.7 billion for its own account and $6.6 billion held for participants in loan syndications.
