May 8, 2020 / 2:16 PM / in a month

Turkey plans nearly $3-bln capital injection for state banks -sources

ISTANBUL, May 8 (Reuters) - Turkey aims to inject roughly 20 billion lira ($2.81 billion) of new capital into three state banks - Ziraat Bank, Halkbank and Vakifbank - in coming days, two banking sources told Reuters on Friday.

Turkish banks have relatively high capital buffers, though state lenders generally hold less than their private peers. They are under increased pressure to lend in the face of the coronavirus pandemic that is tipping Turkey’s economy into what is expected to be its second recession in less than two years.

A spokesman for the Treasury did not immediately comment.

“We expect necessary regulation to be announced and published next week to increase capital of the state banks,” said one of the sources, both of whom requested anonymity.

“The capital increase will be at around the 5 to 7.5 billion lira level for each state bank, totalling about 20 billion lira,” the source said.

Halkbank stock was up around 2.5% and Vakifbank up 1.5% at 1400 GMT, while Istanbul’s main share index and banking index were each down 0.6%.

Analysts said the bank shares had been boosted by expectations of fresh capital. Ziraat is unlisted. (Reporting by Ebru Tuncay, Orhan Coskun and Birsen Altayli; Editing by Ezgi Erkoyun and Jonathan Spicer)

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