Bank That Suffered Erdogan’s Fury Soars on Auction to Evade Ruin

  • Bank Asya shares jump 41 percent in two days, most since 2014
  • Auction may spare the Islamic lender from being liquidated

An auction that could save Bank Asya from liquidation spurred the steepest two-day jump in the lender’s stock since 2014.

The Istanbul-based company, which sank to a record low this week, advanced 19 percent in Istanbul to 0.76 lira. That brings the equity’s advance to 41 percent since an auction notice published in the official gazette on Tuesday appraised the company at 0.7 lira per share. The company in September 2014 was moved to Borsa Istanbul’s watchlist market, which limits trading on the stock.

The Savings Deposit Insurance Fund, responsible for resolving failed companies, plans to sell shares that represent about 51 percent control over the lender in June. The announcement came less than three months after the fund -- also known as TMSF -- said it will liquidate the bank if a sale or merger isn’t secured before the end of May. It took control of the lender last year.

“Gloomy prospects seem to be changing as some investors see the notice as an indication that there could be a potential buyer interested in Bank Asya,” said Duygun Kutucu, an Istanbul-based banking analyst at Burgan Yatirim Menkul Degerler.

The auction is rare good news for the bank, which has endured regulatory action that began after President Recep Tayyip Erdogan blamed Fethullah Gulen and his supporters for a corruption probe. The investigation implicated some cabinet members, prompting Erdogan to crack down on the cleric’s interests in Turkey. TMSF will seek to sell a minimum 183.6 million Class A shares on June 24.

Bank Asya, which used to be Turkey’s biggest Islamic bank, was founded by Gulen’s followers. The lender finished last year as the nation’s smallest Shariah-compliant bank by assets after Ziraat Katilim Bankasi AS.

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