Turkey's BDDK asks banks not to distribute their profits

"It is important to maintain equity capital for banks and the real sector in order to avoid being affected by the global financial crisis," hurriyet.com.tr said citing a statement sent to banks by the BDDK.

Banks in Turkey who distributed nearly 15 billion YTL ($9.69 billion) in 2007 are expected to distribute the same amount in 2008. With this move, the BDDK aims to strengthen the banks' hand and allow them to provide the real sector with more credit during the global financial crisis, the report said.

Those banks still wanting to distribute their profits should apply to the BDDK, the report said citing the statement. Banks would only be eligible to distribute profits following the BDDK's monitoring and approval, it added.

The Turkish government, harshly criticized for being late to take the necessary measures against the possible impacts of the global financial crisis, has recently sped up its efforts.

As an example of these moves the authorization guaranteeing bank deposits to an increased 50,000 YTL ($32,433), which is assessed as a signal, passed to the government for a period of two-years on Thursday. The Turkish Savings Deposit Insurance Fund (TMSF) had previously held this authorization.

However, the government is yet to sign a stand-by deal with the International Monetary Fund that is seen as an anchor for country's economy.