Recent Development

The Banking Regulation and Supervision Agency ("BRSA") published in a regulation amending the Regulation on Mergers, Acquisitions, Spin-off and Share Exchange of Banks ("Regulation") in the Official Gazette No. 30242 and dated November 16, 2017. The amendments entered into force on the same day.

What's new?

The Regulation included more elaborate procedures for bank spin-offs compared to other companies. The BRSA redefined the term "spin-off" and ruled that certain partial spin-offs do not fall into the scope of the Regulation. In other words, these excluded bank spin-offs will be carried out in accordance with the general procedures under the Turkish Commercial Code and other applicable laws. In this respect:

  • Partial spin-offs resulting in the partial transfer of assets of a bank in a manner not triggering the dissolution of the bank and resulting in the creation of a subsidiary relationship between the bank and the acquiring entity by the bank's acquisition of the shares of the acquiring entity in exchange for the transferred assets ("Excluded Spin-offs") are excluded from the scope of the Regulation.
  • In respect of the Excluded Spin-offs of the deposit and participation banks, if the deposit or participation funds are among the assets to be transferred, the transferee must still be a deposit or participation bank.
  • If, as a result of an Excluded Spin-off, the bank's capital falls below the minimum legal requirement, the bank's shareholders must commit the difference between the bank's capital and the minimum capital requirement specified in the legislation within three months.

Conclusion

The amendment eases the partial spin-offs having specific features by excluding them from the BDDK procedures.