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Turkish state owned Vakifbank obtains banking licence from Qatar

Permission to operate comes as opposition claims Doha is planning to buy shares from the bank
A pedestrian passes in front of state run Vakifbank on Istiklal Avenue in Istanbul. (AFP)
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A Turkish state bank has obtained a licence to carry out financial operations in Qatar, in a sign of growing cooperation between the two allies amid heightened regional tensions and a mounting economic crisis in Turkey.

Vakifbank, a state-owned lender, said on Monday that Qatar's Financial Centre Regulatory Authority approved its application to operate in the Gulf country.

'We have become the first and only Turkish bank to receive a licence from Qatar'

- Abdi Serdar, Vakifbank general manager

Vakifbank general manager Abdi Serdar Ustunsalih said in a written statement that the bank was on a mission to expand its foreign operations by opening up new branches in new countries such as China.

“We have become the first and only Turkish bank to receive a licence from Qatar,” he said.

“In accordance with our country’s national interests, we are expanding our operations abroad as a power that stands with Turkish entrepreneurs and business people.”

Ustunsalih noted that Vakifbank - Turkey's fourth-largest bank with $61bn in assets - also had a presence in the Iraqi Kurdish city of Erbil and Bahrain.

Several Turkish opposition MPs had suggested the government was planning to sell Vakifbank to Qatar following the government's decision to take control of the bank in December.

About 25 percent of the bank's shares are publicly traded.

Cihan Pacaci from the nationalist IYI Party and Haluk Peksen from the main opposition party CHP claimed that one of the chief reasons for the takeover could be a sale to Qatar.

Treasury and Finance Minister Berat Albayrak said last November during a speech at parliament that there would be more privatisation and public offerings to create new income for the state budget.

Qatari investments

Observers have pointed out that it could very well include Vakifbank as Qatar already indicated interest in buying more stakes in Turkish banking industry.  

In 2018, during the height of a currency crisis, Qatar committed $15bn in investment to Turkey to shore up support for her ally’s economy.

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Yousuf al-Jaida, CEO of the Qatar Financial Centre, told Turkish news wire Anadolu last December that Qatar was planning to invest $7bn this year in Turkey.

“Qatar will continue to invest in Turkey not only in the banking sector but also in the real estate sector,” he said.

Two countries also have a bilateral currency swap deal worth $5bn that was updated last November to help depleted Turkish foreign currency reserves. 

The fall in the reserves, coupled with fears over a possible drop in the value of the lira, have led to stark predictions about Turkey's economic prospects.

Turkey and Qatar have maintained strong geopolitical and military ties, including a partnership against Libyan military commander Khalifa Haftar, whose Libyan National Army (LNA) has been conducting an operation against the UN-recognised Tripoli government since last year.