Turkey’s Aktif Bank gets approval for $91m in sukuk

Turkey's largest privately owned investment bank, has received regulatory approval to issue 200 million lira ($91 million) in Islamic bonds, the Capital Markets Board said.

The lender will sell the sukuk to qualified investors through its asset leasing company, Aktif Bank Sukuk Varlk Kiralama. It gave no time frame for the deal.

The emergence of corporate sukuk in Turkey is seen as a litmus test for efforts to develop Islamic finance by the government, which issued a maiden $1.5 billion sovereign sukuk in 2012 to encourage the industry's development.

The global sukuk market is growing fast, with year-to-date issuance up 16.3 percent from last year at $88.9 billion, according to Zawya, a Thomson Reuters company.

But the market remains reliant on sovereign and quasi-sovereign issuers, which represent a combined 77 percent of the total. Most corporate sukuk come from Malaysia, so issuers from Turkey could help deepen the market.

Last month, Turkish conglomerate Dogus Group received regulatory approval to raise $370 million via sukuk in what would be the first dollar-denominated corporate transaction of the kind in the country.

Until now, Turkey has only seen significant issuance of sukuk from the government and the country's four Islamic banks, known as participation banks.

Last year, Aktif Bank helped raise a small one-year 100 million lira sukuk for construction-to-energy firm Agaoglu Group using a sukuk structure known as mudaraba.

The Capital Markets Board has outlined new regulations to allow a wider range of sukuk structures, as the initial rules focused on ijara, an Islamic sale-and-lease-back contract.

Ijara requires the issuer to have income from a leased asset such as real estate, a limiting factor for many companies.