39781 - DCM Akbank CBond

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Summary of Investment Information

Project Number

39781

Company Name

AKBANK TURK ANONIM SIRKETI

Date SPI Disclosed

Jul 6, 2017

Country

Turkiye

Region

Central Asia and Turkiye

Projected Board Date

Aug 6, 2017

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Nov 16, 2023

Department

Regional Industry - FIG - ECA

Industry

Financial Markets

Previous Events

Approved : Aug 4, 2017
Signed : Sep 29, 2017
Invested : Oct 16, 2017

Sector

Commercial Banking - Housing Finance

Project Description

The proposed project involves supporting a leading Turkish commercial bank and an existing IFC partner, Akbank T.A.S. (“Akbank”), through the purchase of an IFC-only issuance of mortgage covered bonds of up to US$150 million or its equivalent in Turkish Lira.

Proceeds from IFC’s investment would be used to support the extension of housing loans to Turkish borrowers, helping further strengthening residential housing finance, including green mortgages.

Incorporated in 1948, Akbank is one of the leading banks in Turkey with approximately US$86 billion in consolidated assets as of March 31, 2017. The bank offers universal banking services via its close to 840 branches throughout Turkey in addition to its active presence through digital channels, and it employs over 13,800 staff members.

Associated Advisory Engagement

N.A.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	150.0
Equity

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Housing Finance

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

i) The Project would support further growth in the mortgage sector: IFC long term funding would enhance access to housing finance in Turkey, which has an attractive demographic profile and is underpenetrated. ii) Mitigate climate change by financing energy efficient green residential buildings. iii) Supporting a covered bond program in Turkey that meets international standards.

i) Longer tenors: IFC will provide longer-term funding, critical to mortgage lending, which would help Akbank respond to its clients' long-term funding needs. ii) Local currency financing: IFC's investment is likely to be provided in Turkish Lira, which would provide long-term, local currency financing which is highly preferred by Akbank. iii) Strategic Partnership: The Project would deepen IFC's existing long-term partnership with systemically important bank in priority areas such as green mortgages.

E&S Category Rationale / Risks and Mitigation

The project consists of supporting Akbank, through the purchase of an IFC-only issuance of mortgage covered bonds of up to US$150 million or equivalent in Turkish Lira. The proceeds of IFC's investment would be used to finance residential mortgages by the Bank. The project has been classified as a Category FI-3 according to IFC's Environmental and Social Review Procedure, since mortgages have low E&S risks by nature. As part of an existing investment, Akbank has established an Environmental and Social Management System, applicable to the MSME segment of the Bank. The implementation has recently started. The requirements under the existing project will remain unchanged, including compliance with IFC's PS2 on Labor and Working Conditions.

Contacts

For Inquiries About the Project, Contact

Akbank T.A.S
Levent Cem Egritag
International Banking Senior Vice President
+90 (212) 385 62 46
Cem.Egritag@akbank.com
Sabanci Center 4.Levent, 34330 Istanbul, Turkey
www.akbank.com

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