President Recep Tayyip Erdoğan said Türkiye will combine its three state-owned participation banks, presenting the move as part of a broader effort to expand the role of interest-free finance in the country, reported Daily Sahab.
Speaking at the 3rd Global Islamic Economy Summit, Erdoğan named the banks as Ziraat Katılım, Vakıf Katılım and Halk Katılım.
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He said the merger would bring the institutions together under one structure.
“Participation finance is a fairer and safer model not just for Muslims, but for the entire world,” Erdoğan told the summit.
He also referred to the expected effect of the transaction on the sector.
“Combining the strengths of these three participation banks will create significant synergy. God willing, the sector will gain new momentum,” the president noted.
Erdoğan also said Emlak Katılım is being readied for an initial public offering.
According to his remarks, this would let members of the public take part in the bank’s ownership.
He said the institution was reorganised in 2018 out of Emlak Bank and has since taken an important place in the participation finance system.
No schedule or additional details were given for the bank merger or the planned share sale.
Erdoğan said participation finance and related capital market products have increased their presence in Türkiye’s financial system over time.
According to figures he cited, companies in the participation index accounted for 36% of the total market value of firms listed on Borsa Istanbul in the first quarter of 2026.
He said the combined active assets of Türkiye’s 10 participation banks, including three digital lenders, now exceed TL 4.7tn (over $100bn).
Their share of the country’s banking sector has reached 9.5%, he added.
Erdoğan also said repeated financial instability would continue without wider structural changes.
“Financial crises cannot be prevented without transitioning to an economic and financial paradigm centered on the principles of justice, ethics, production and equitable distribution,” Erdoğan noted.
