Global investment bank Goldman Sachs, Bain Capital, the European Bank for Reconstruction and Development (EBRD) and the World Bank Group's International Finance Corporation (IFC) reportedly met yesterday to discuss the structure of a fund that will be established for the nonperforming exposure of Turkish banks.
Local and foreign banks discussed the operational structure of two funds that will facilitate excluding bad loans from the balance sheet of Turkish banks.
Foreign investors and institutions interested in nonperforming loans (NPLs) were to attend the meeting in Istanbul arranged by PricewaterhouseCoopers (PwC), it was reported, with sources requesting anonymity because they were not authorized to discuss it.
The meeting is aimed at bringing together domestic and foreign investors to discuss the sale of companies and assets with high debt, one source close to the matter said, adding that potential obstacles and solutions were to be discussed.
Asset management companies and portfolio managers will join the meeting, as well as the International Bank for Reconstruction and Development (IBRD), high-ranking banking officials and foreign funds, the source said.
"International investors will discuss the process of transferring bad loans, which is being planned by banking officials and the government," another source said.
Reuters had earlier reported that Wall Street bank Goldman Sachs Group Inc, Japanese financial services group Orix Corp and U.S. private equity firm Bain Capital were in talks with Turkish banks and companies to buy large distressed loans.
The loans in Turkey's banking sector amount to TL 2.5 trillion as of end-March, with TL 100 billion restructured. The NPL ratio stands at 4.04 percent and is generally expected to rise to 6 percent by year-end, though some analysts predict it could double to 8 percent. Finance Minister Berat Albayrak said last month that Turkey would offer a nearly $5-billion injection for state banks in order to help them improve their balances. He said problematic loans in the energy and construction sectors would be moved to two off-balance sheet funds to relieve banks.