Turkey’s biggest bank announced on Monday it had secured a syndicated loan totaling $1.24 billion, achieving to fully renew the loan it had secured last year.

The loan will be used according to environmental sustainability criteria and to support gender equality in production, Ziraat Bank said in a statement.

The deal was done under the coordination of Abu Dhabi Commercial Bank PJSC (ADCB), Emirates NBD Capital Limited and the Commercial Bank PSQC.

The Emirates NBD Capital Limited, Standard Chartered Bank and Sumitomo Mitsui Banking Corporation undertook the role of sustainability coordinators in the agreement.

Ziraat said $352.5 million of the loan was borrowed at the secured overnight funding rate (SOFR) plus 275 basis points and an 814 million euro ($885.88 million) portion was borrowed at Euribor plus 210 basis points.

The loan saw interest from 45 banks in 21 countries, the public lender noted.

"We evaluate this interest as an indicator of the confidence in the Turkish economy, the Turkish banking sector and our bank in all circumstances," Ziraat Bank General Manager Alpaslan Çakar said in the statement, stressing a challenging environment also marked by monetary tightening on a global scale.

"Our bank will continue to support the real sector and sustainable economic growth with this resource through foreign trade transactions," Çakar noted.

The capital of Ziraat Bank was in mid-February increased by TL 21.8 billion to TL 34.9 billion, with the amount said to be paid by the Turkey Wealth Fund (TWF).

The move is meant to stabilize banks and position state lenders, especially to boost lending in line with the central bank’s series of interest-rate cuts.

The TWF fully owns Ziraat Bank, 75% of Halkbank and 36% of VakifBank, according to public data.

Halkbank and VakıfBank earlier in February said they would carry out capital increases by private placement, with combined total sales proceeds of TL 26.8 billion and the shares issued to be sold to the TWF.

The government has been endorsing a model based on lower borrowing costs to boost credit, exports and investment.

To support the drive, Turkey’s central bank had brought down the key policy rate by 500 points since September to 14% but held it steady in three monetary policy meetings this year. It is expected to keep its one-week repo rate unchanged again on Thursday.

The government has relied on public lenders, as they boosted their lending throughout the pandemic, helping the economy avoid a contraction and mount a strong recovery.