Turkish Banks Race to Pay Out Dividend After Two-Year Ban Lifted

Turkish lenders proposed resuming cash dividends after the banking regulator removed a two-year ban on payouts.

Private lenders Akbank TAS, Yapi ve Kredi Bankasi AS and Turkiye Sinai Kalkinma Bankasi AS announced their plans in public filings to Borsa Istanbul. The banking regulator, known as BDDK, permitted banks last month to pay as much as 10% of last year’s net income as dividends.

Akbank proposed a gross cash dividend of 0.1204 lira per share, amounting to 8.49% of its net distributable income. Yapi Kredi will pay out 8.81% of its net distributable income, while TSKB will issue 8.95%. Proposals are pending approval of banks’ annual general assembly meetings.

Turkish banks have long sought a reprieve on dividends. The relaxed guidance marks another step in authorities’ efforts to undo the policies adopted by Berat Albayrak, President Recep Tayyip Erdogan’s son-in-law who resigned as economy czar in November.

By returning to a more orthodox approach, Turkey has lured $4.8 billion into its assets since November. The lira has meanwhile staged a 15% rally from a record low late last year.

The policy reversal is setting the nation’s lenders on course for improved profitability in 2021, with the average return on equity expected to rise above inflation for the first time since a currency crisis in 2018.

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