Turkey to merge three state-owned Islamic banks, plans IPO for Emlak Katılım
President Recep Tayyip Erdoğan on Friday announced plans to consolidate Ziraat Katılım, Vakıf Katılım and Halk Katılım banks, and to launch an initial public offering for Emlak Katılım. Speaking at the 3rd Global Islamic Economy Summit, Erdoğan said the merger would create "significant synergy" and open a new era for the sector. He did not provide a timeline or further details on either move.
President Recep Tayyip Erdoğan on Friday announced plans to consolidate three state-owned Islamic banks and to launch an initial public offering (IPO) of Emlak Katılım, speaking at the 3rd Global Islamic Economy Summit in Istanbul.
Erdoğan said Ziraat Katılım, Vakıf Katılım and Halk Katılım banks would be merged, stressing that the move would create "significant synergy" and initiate a new era in the sector. "Combining the strengths of these three participation banks will create significant synergy. God willing, the sector will gain new momentum," he told the summit. He did not provide a timeline or further details on the merger.
The president also outlined plans for an IPO of Emlak Katılım, a participation bank restructured in 2018 from Emlak Bank. Erdoğan said the IPO would allow citizens to become partners in the bank's growth. He did not provide a timeline or further details on the listing.
Erdoğan described participation finance — interest-free or Shariah-compliant finance — as a "fairer" model for the whole world. "Participation finance is a fairer and safer model not just for Muslims, but for the entire world," he said.
Citing sector data, Erdoğan said the market value of companies in the participation index reached 36% of the total market value of companies traded on Borsa Istanbul in the first quarter of 2026. The active asset size of 10 Turkish participation banks, three of which are digital, stands at more than TL 4.7 trillion (over $100 billion), he noted. Their market share within the banking sector has reached 9.5%, he added.
Referring to global financial risks, Erdoğan cited Institute of International Finance data showing global debt reached $350 trillion in the first quarter of 2026. "How sustainable this debt burden is remains a serious question that must be answered for the future of the global economy," he said.
Erdoğan also addressed multiple crises facing the Islamic world, including Israeli operations in Gaza, the West Bank and East Jerusalem, as well as instability linked to the Iran war and disruptions in the Strait of Hormuz. He said the Middle East conflict and its fallout are "negatively affecting not only our brotherly nations in the Gulf but the entire world."