Turkiye’s Akbank recently raised USD 300 million through the issuance of subordinated bonds to three development finance institutions. Half of the fresh cash is from the US International Development Finance Corporation (DFC) for on-lending for business and consumer purposes to women in “underdeveloped cities” in the country. The remainder is divided evenly between the multilateral Asian Infrastructure and Investment Bank (AIIB) and the World Bank Group’s International Finance Corporation (IFC).
Levent Celebioglu, Akbank’s Executive Vice President of Corporate & Investment Banking, described the funding from AIIB and IFC, which carries terms of 10 years, as earmarked for “green SME [small and medium-sized enterprise] and commercial clients through [Akbank’s] sustainability strategy and recently enhanced Sustainable Finance Framework.”
Akbank is a commercial bank that was established in 1948 to serve the cotton industry in Turkiye. It has since diversified to serve a range of sectors and has total assets of TRL 1.5 trillion (USD 56 billion), deposits of TRL 1.0 trillion (USD 37 billion), net loans of TRL 751 billion (USD 28 billion) and six-month net income of TRL 31 billion (USD 1.2 billion) as of June 2023.
DFC was initiated in 2020 to “help businesses expand into emerging markets, foster growth and improve lives in the developing world while reinforcing US foreign policy and national security interests.” The organization issues equity placements, loans, guarantees, insurance, technical assistance and research in sectors such as energy, medicine, infrastructure and technology. As of July 2023, DFC reported an outstanding portfolio of USD 36 billion following the net disbursement of USD 7.4 billion during 2022.
AIIB was launched in 2016 and is based in China. The institution has 106 member countries and focuses on financing infrastructure that offers “new ways in which to address climate change.” As of March 2023, AIIB reports total assets of USD 53 billion.
Founded in 1956, IFC offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in low- and middle-income countries. During the 12-month period ending June 2022, the organization disbursed investments totaling USD 33 billion.
By Anaya Jhaveri, Research Associate
Sources and Additional Resources
Akbank press release
https://www.akbankinvestorrelations.com/en/news/detail/Akbank-Announces-300-million-in-Sustainability-and-Gender-Tier-2-Issuance/674/1938/0
Akbank Sustainable Finance Framework description
https://www.akbankinvestorrelations.com/en/images/pdf/Second-Party-Opinion.pdf
DFC homepage
https://www.dfc.gov
AIIB homepage
https://www.aiib.org
IFC homepage
https://www.ifc.org
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