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Turkey’s banking watchdog prevents İş Bankası from distributing net profit

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Turkey’s banking watchdog the BDDK has not approved İş Bankası’s application for the cash distribution of its net profit, the bank said late on Thursday, according to Reuters.

The BDDK said profits should be retained in the bank in line with its general prudent policy for the banking system, to keep the equity structure of the sector as strong as possible, the bank said in a statement to the İstanbul Stock Exchange.

The bank said its board of directors proposed to its general assembly that the legal reserves be reserved and the remaining part of the profit set aside as extraordinary reserves.

İş Bankası posted a net profit up 9.2 percent in 2018 to 6.8 billion lira ($1.27 billion).

President Recep Tayyip Erdoğan on Feb. 5 said the 28 percent stake of the main opposition Republican People’s Party (CHP) in the bank would be transferred to the Treasury.

The CHP was left shares in İş Bankası in the will of Mustafa Kemal Atatürk, the founding father of the modern Turkish Republic.

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