(Bloomberg) -- Turkish President Recep Tayyip Erdogan said the Treasury would take over the nation’s largest listed lender Turkiye Is Bankasi A.S., sending the bank’s shares plunging.
“Isbank will become the property of the Treasury with the permission of God,” Erdogan told his ruling AK party’s parliamentary faction in Ankara on Tuesday, calling on the legislature to make “this historic decision.”
The move would be opposed by the main opposition party CHP, which holds about 28 percent of Isbank’s shares, but Erdogan indicated he has the support of his allies in parliament to soon force a vote on the takeover.
The CHP doesn’t get any dividends from Isbank but Erdogan still accuses it of “exploiting” Mustafa Kemal Ataturk, the founder of modern Turkey who bequeathed Isbank shares to the party he created in his will. The president contends that what once belonged to the founder of the Turkish state shouldn’t be owned by a political party.
The lender has said in the past that any effort to nationalize it would amount to a financial crime. The CHP has resisted Erdogan’s demands to give up its stake in the lender and its four seats on the board.
The AK party lacks the parliamentary majority needed to unilaterally change the laws on the bank’s ownership but Erdogan suggested its junior partner in the assembly, the nationalist MHP, would support his legislative efforts to enable the Treasury’s takeover.
Isbank shares fell as much as 6 percent on Erdogan’s comments and were trading 1.2 percent lower as of 1 p.m. in Istanbul. The lira also trimmed gains and was trading 0.2 percent higher at 5.2067 per dollar.
(Updates with more background throughout.)
