Türkiye Wealth Fund Signs for 2 Participation Banks as Sector Share Reaches 9.59 Percent
Türkiye Wealth Fund’s wholly owned vehicle TVF Katılım Finans Yatırımları signed share transfer agreements on 7 October to take over all of the shares of Ziraat Katılım, owned by state lender Ziraat Bankası, and Halk Katılım, the fund said in a statement dated 9 October. Participation banks had 5.35 trillion lira of assets at the end of August, equivalent to 108.81 billion dollars and 9.59 percent of Turkish banking system assets, on our calculation from figures published by the Banking Regulation and Supervision Agency (BDDK).
What was signed
The fund said it aims to complete the transfers by the end of 2026, once the required legal and regulatory processes are finished. It called the signing the first stage in combining public-capital participation finance institutions, said work to bring them under a single roof was continuing on the set timetable, and tied the step to a goal of raising participation finance’s share of the financial markets. The shares are to be taken over against payment. The statement gave no price. The signing date leaves 85 days to the year-end target, on our calculation. In filings to the Public Disclosure Platform (KAP) on 9 October, Ziraat Bankası and Halkbank each said its board had resolved to carry out the procedures for transferring its 99.99 percent stake, in Ziraat Katılım and Halk Katılım respectively, to the fund’s vehicle, and that it had applied to the relevant regulatory authority for the necessary permissions and approvals. Neither filing gave a price.
The buyer appears in the fund’s portfolio as a company founded in 2026 and owned 100 percent by the fund, which also lists itself as owner of 100 percent of Ziraat Bankası. On our reading, Ziraat Katılım therefore passes from one wholly owned company of the fund, Ziraat Bankası, to another, the new vehicle.
The two banks are at different stages. Ziraat Katılım is one of the 10 participation banks on the regulator’s list of banks, and KAP’s company page for it gives a paid-in capital of 10.35 billion lira, of which Ziraat Bankası holds 10,349,999,996 lira and 4 group companies hold 1 lira each. Halkbank’s filing describes Halk Katılım as a bank that has been granted an establishment permit. The regulator approved its founding, with 11.5 billion lira of founding capital, by a decision dated 30 May 2025, and Halk Katılım is not on the regulator’s list of banks. The regulator’s August statistics count 10 participation banks, so on our reading the segment figures below do not include it.
The fund’s bank holdings and the buyer
| Company | Owner | Stake |
|---|---|---|
| Ziraat Bankası | TVF | 100% |
| Halkbank | TVF | 91.5% |
| VakıfBank | TVF | 73.26% |
| TVF Katılım Finans Yatırımları | TVF | 100% |
| Ziraat Katılım | Ziraat Bankası | 99.99% |
| Halk Katılım | Halkbank | 99.99% |
Stakes in the first four rows as listed on the fund’s portfolio page; the two participation bank stakes as stated in the sellers’ filings of 9 October. Positions before the transfers.
A segment growing faster than the system
The regulator’s August 2026 bulletin shows participation bank assets 48.55 percent higher than a year earlier, on our calculation. The whole banking sector grew 33.09 percent over the same 12 months. The segment’s share of total bank assets therefore rose from 8.59 percent to 9.59 percent, a gain of 1.00 percentage point in a year. Participation banks supplied 12.61 percent of the 13.86 trillion lira increase in system assets, and with them stripped out, the rest of the system grew 31.63 percent.
Funding nearly kept pace with assets; loans did not, on our reading of the same tables. Participation funds, which the regulator reports on the deposit line, rose 47.87 percent, lifting the segment’s share of system deposits from 10.04 percent to 11.08 percent. The loan line rose 40.72 percent, taking the segment’s share of system loans from 7.83 percent to 8.07 percent. Equity rose 41.63 percent. Net profit in the regulator’s August profit and loss table came to 9.57 percent of the sector total, close to the segment’s 9.59 percent share of end-August assets, a comparison of shares rather than a measure of return on assets.
Participation banks against the Turkish banking system, August 2026
| Measure | Participation banks | All banks | Share |
|---|---|---|---|
| Total assets | 5,345,523 | 55,745,591 | 9.59% |
| Loans | 2,272,851 | 28,156,879 | 8.07% |
| Funds and deposits | 3,563,247 | 32,157,365 | 11.08% |
| Equity | 371,574 | 4,772,217 | 7.79% |
| Net profit | 64,735 | 676,385 | 9.57% |
Million lira, from the bank-group balance sheet tables of the BDDK monthly bulletin for August 2026; the loan line excludes loans to banks. Shares are our calculation. Net profit is the period result in the August profit and loss table. The dollar equivalent in the text is our calculation at the Central Bank of the Republic of Türkiye’s indicative buying rate of 49.1274 lira per dollar on 9 October.
A different balance sheet
On the regulator’s loan line, the ratios describe a model that lends out less of its funding and carries more foreign currency. Participation banks’ loans equalled 63.79 percent of their funds in August, against a loan to deposit ratio of 87.56 percent for all banks. A year earlier the 2 ratios stood at 67.02 percent and 85.96 percent, so the gap has widened to 23.77 percentage points as funds outran loans in the segment while lending outran deposits in the wider system. More than half of the segment’s assets and of its funds are in foreign currency, 50.31 percent and 50.44 percent, 12.36 and 11.99 percentage points above the system respectively. These shares describe the currency composition of the balance sheet, not the size of any open currency position.
Book equity is lower relative to the balance sheet. Equity equalled 6.95 percent of participation bank assets, against 8.56 percent for the system, an accounting ratio rather than a regulatory capital adequacy measure, and the segment’s 7.79 percent share of sector equity trails its 9.59 percent share of assets.
The branch network is wider than the balance sheet; the cash machine network is not. The regulator counts 10 participation banks among 67 in the system. They run 1,507 domestic branches, 14.31 percent of the system’s 10,528, and employ 22,822 people at home, 10.85 percent of 210,336. Their 2,534 cash machines are 4.66 percent of the system’s 54,380.
Balance sheet ratios, August 2026
| Ratio | Participation banks | All banks |
|---|---|---|
| Loans to funds and deposits | 63.79% | 87.56% |
| Foreign currency share of assets | 50.31% | 37.95% |
| Foreign currency share of funds | 50.44% | 38.45% |
| Equity to assets | 6.95% | 8.56% |
| Assets per domestic branch, million lira | 3,547 | 5,295 |
Our calculation from the regulator’s August 2026 balance sheet and network tables.
Inside the fund’s portfolio
The fund’s website gives its equity as 2.7 trillion lira and its portfolio as 36 companies in 7 sectors plus 2 licences and real estate. Its financial services page places Türkiye’s 3 large public banks by asset size and Borsa Istanbul in the portfolio, along with 2 companies founded in 2023 and owned 100 percent by the fund, Türkiye Katılım Sigorta and Türkiye Katılım Hayat. Once the transfers are completed, on our reading, the fund will also hold 2 participation banks through TVF Katılım Finans Yatırımları.
Why it matters: Once completed, the transfer will put Ziraat Katılım and Halk Katılım under one owner, a vehicle of the fund, at a time when the participation bank segment is adding assets faster than the rest of the system, 48.55 percent against 31.63 percent over the year to August. The fund has linked the step to enlarging participation finance’s share of the financial markets, and the segment already accounts for 9.59 percent of bank assets and 11.08 percent of deposits. Its balance sheet sets the terms for that growth: more than half of it is in foreign currency, the loan line absorbs less than two thirds of funds, and book equity relative to assets is below the system average.
Outlook: Completion depends on legal and regulatory clearance, with the fund targeting the end of 2026. It has said the combination of public-capital participation finance institutions is proceeding on its timetable, which points to further steps after this first stage. The regulator’s September bulletin will show whether the segment’s share of bank assets continues to climb from 9.59 percent.
Sources: Türkiye Wealth Fund, BDDK, Ziraat Bankası, Halkbank, Ziraat Katılım, Central Bank of the Republic of Türkiye, The Edge.
