Turkish banking authority BDDK today approved for operations Emlak Katilim Bankasi, making it the sixth Shariah-compliant bank in the country.
The state-owned Emlak converted to become a participation bank, as Islamic banks are called in Turkey.
It focuses on the construction and real estate sectors.
Turkey’s government aims to increase the share of Shariah-compliant banking assets to 15 percent of the country’s total banking sector by 2025.
In December 2018, participation banks held 206.8 billion Turkish liras ($38.9 billion) in assets, accounting for 5.3 percent of the banking sector, according to data from the Participation Banks Association of Turkey (TKKB).
This was up from 160.7 billion liras in December 2017, when Islamic banking assets made up 4.9 percent of the banking sector.
To expand the sector, the government opened two Islamic banks prior to Emlak: Ziraat in 2015 and Vakif in 2016.
The other participation banks are Albaraka Turk, Kuveyt Turk and Turkiye Finans.
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