Turkey's Ulusal Bank falls victim to crisisgreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
Turkey's Ulusal Bank falls victim to crisis By FT.com staff Published: February 28 2001 09:27GMT | Last Updated: February 28 2001 11:00GMT
Turkey's economic crisis claimed its first bank casualty on Wednesday, when the Turkish Banking Supervisory Board said it was taking control of Ulusal Bank.
The board said it was taking action because the bank could no longer fulfil its obligations and its debts exceeded its assets.
Ulusal Bank is the country's 31st largest bank and is owned by the Cingillioglu Group, which also owned Demirbank, Turkey's ninth largest bank, before it was taken under the control of the board last year.
Ulusal accounts for around 0.6 per cent of total bank assets in Turkey and until recently was an active player in the bond market.
The move comes days after the Turkish government was forced to abandon a key element of its IMF-backed economic reform programme by floating the lira. The currency has since depreciated by around 30 per cent against the dollar.
Ulusal's collapse takes the number of failed banks in Turkey to 12. Several failures occurred before the present crisis and there could now be further casualties.
Turkey has 80 banks but more than half its pre-crisis assets of around $140bn are controlled by four state banks.
There was also a tier of smaller to medium banks which once survived on profitable government debt when inflation and interest rates were high.
In recent years as interest rates have fallen, margins have decreased and the smaller banks are struggling to survive.
-- Martin Thompson (email@example.com), February 28, 2001