ECONOMY

Turkish bank merger

ANKARA (Reuters) – Turkey’s government submitted a bill to Parliament yesterday paving the way for the merger of state-run Halkbank and Pamukbank under a loan program with the International Monetary Fund. Turkey has promised to merge the two banks before privatizing Halkbank. Pamukbank has been in receivership since regulators seized it in 2002. The IMF has said before it does not object to the merger between Pamukbank and Halkbank. Several attempts to sell Pamukbank have failed. The government is working to complete the merger, a precondition for completing the eighth review of Turkey’s $19 billion IMF accord, before the fund’s executive board meets by August 15 to discuss the program and release a $660-million loan tranche. According to the bill, Halkbank will acquire Pamukbank and its assets and liabilities from the state banking fund, TMSF, which holds insolvent banks in receivership. The Treasury will issue special papers for the TMSF to cover a possible capital deficit at Pamukbank.