Ankara, Turkey, 08 April 2020 – With more than 1,300 employees recruited during the span of three years,  Turkey’s Vakıf Katılım Bank is counted as one of the outstanding success stories of Islamic Development Bank (IsDB)’s investments in the country’s Islamic finance sector and Waqf asset management.

Vakıf Katılım Bank’s asset size, which started its operations in 2016, reached US $4.8 billion in 2019, only three years after its officially commenced operations. This amount of asset size equals 10.6% of the total Islamic banking sector’s assets in Turkey. 

The progress comes amid the Government of Turkey’s target policy to enhance Islamic banking from the 5-6% level to 15% market share within the overall banking sector in the country by 2025.

The Bank was established after Turkey’s General Directorate of Foundations (GDF) approached the IsDB to launch a new Islamic bank in the country to be owned by GDF. Upon this initiative, IsDB provided a US $300 million long-term facility to GDF under the sovereign guarantee of the Government of Turkey through an innovative Shariah compliant Restricted Mudaraba modality.

The capital injection for the new bank took place in 2015 and within 2016-2019 Vakıf Katılım Bank expanded into a network of more than 100 branches all across the nation where it served more than 270,000 clients in 2019.

Vakıf Katılım Bank has also been issuing Sukuk regularly, thereby, contributing to the depth and range of Islamic finance products in Turkey. According to TKBB (Participation Banks Association of Turkey), Vakıf Katılım Bank was the leader and issued the highest amount of Sukuk in Turkish Lira (TRY 9,01 billion) among participation banks in 2019.

As Mr. Ikram Göktaş, CEO of Vakıf Katılım, says the bank’s objective is to not only achieve a bigger market share in the participation banking sector but also grow the overall sector and economy. “We have been exerting a great effort to attract more investors from the home country and abroad thereby including them in our participation finance system, diversify our funding sources and channel the collected funds to more people”, he adds.

 Vakıf Katılım Bank was awarded the “Most Successful Participation Bank” prize in Turkey during the Second İstanbul Economy Summit organized in 2019.

In addition, Vakif Katilim achieved to establish one of the few R&D Centers in banking sector in Turkey. R&D Center’s future plans include public sector, university and industry collaboration; and support of FinTech and new technology companies. The Bank also launched a small-scale venture capital fund to support startups in Turkey with significant potential spillover effects.       

The General Directorate of Foundations (GDF), Vakıflar Genel Müdürlüğü in Turkish, was established through a special law in 1924 to take over the responsibility of managing and running 52,000 waqf properties in Turkey.