Akbank has become the latest Turkish bank to turn toward covered bonds, having recently obtained board approval for issuance of up to Eu1bn.

The bank announced the move in a stock exchange announcement on 3 July, which is only available in Turkish. According to the banker familiar with the project, the bank is seeking regulatory approval after its board approved issuance for up to Eu1bn.

He noted that while issuance is expected to be in euros this will be dependent on market conditions and potential pricing.

The announcement from Akbank follows one from Isbank in May that its board of directors authorised the establishment of a covered bond programme for issuance of up to Eu2bn or the equivalent in any currency.

Three Turkish banks have issued SME-backed covered bonds – Sekerbank, DenizBank and YapiKredi – and others such as Garanti Bank and Vakfibank are targeting mortgage-backed issuance.