Erdoğan takeover plan for Turkey’s İşbank a distraction tactic - analyst

Turkish President Recep Tayyip Erdoğan's plans to transfer a 28 percent stake in Işbank, Turkey’s biggest listed lender, to the Treasury, is both a political and economic tactic to undermine and distract the opposition, said Aykan Erdemir, the director of Turkey Program at Washington-based policy institution Foundation for Defense of Democracies (FDD).

Turkey’s economic downturn and the growing public reaction to mounting Turkish casualties in war-torn Syria have prompted the attempt by Turkey’s strongman to change the news cycle with the plan, which is likely to exacerbate the country’s political and economic crisis, Erdemir said.

This would not be Erdoğan’s first attempt to take over İşbank, the article said, pointing to two efforts in September 2018 and February 2019.

In the former, Erdoğan opened an investigation into the status of four board members who were appointed by the CHP), the article said, noting that lender’s shares fell by 6 percent following both threats.

Turkey’s government is reviving plans to commandeer the shares in İşbank owned by the main opposition Republican People’s Party (CHP) after the two parties clashed over the deaths of Turkish soldiers in Syria earlier this month and accused each other of connections to the banned Islamic movement accused of orchestrating the July 2016 coup attempt.

Erdoğan said early last year that the Treasury would take over the CHP’s stake in İşbank, which was awarded to the party by Mustafa Kemal Atatürk, the founder of both modern Turkey and the party.

The takeover of the bank established in 1924 is both a political and economical tactic, as it puts to shame Turkey’s other public lenders who are under the management of finance, the article said.

Erdoğan’s continuing attempts are also compromising relations with other foreign investors such as UniCredit and HSBC, the latter reportedly considering selling its Turkish business “amid concerns about the country’s volatile currency and economic outlook,” the analyst wrote.