The reason behind the cancellation of Halkbank's participation unit was due to the public shares of the bank, according to sources of Turkish daily Sabah. On Oct. 15, Turkey's state-run lender released a statement via the Public Disclosure Platform (KAP) appealing to the Banking Regulation and Supervision Agency (BDDK) to cancel its previous approval for the establishment of a subsidiary participation bank. However, it did not mention the reason for the withdrawal in the statement and said it might re-address its plan in the future.

On Monday, Halkbank CEO Ali Fuat Taşkesenlioğlu said the bank's plan to establish a participation bank has been postponed for judicial reasons. He added that the bank's management team has been working on a new formula that will eliminate the necessity of increasing capital. However, sources speaking to Sabah said the main reason behind this cancellation is because the management of the undersecretariat of the Treasury wants the new participation bank to solely use Turkish capital. However, close to 49 percent of Halkbank's shares are open to the public and 73.29 percent of these shares belong to foreign investors. The judicial reasons mentioned by Taşkesenlioğlu regard arranging this capital separation. Moreover, the establishment of the bank might be brought up again after the Nov. 1 elections. Halkbank's public shares total TL 1.25 billion ($432.4 million), which amounts to 48.89 percent, with the other 51.11 percent belonging to the Prime Ministry's Privatization Administration. The shares owned by foreign investors amounts to 35.6 percent.