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Two Turkish-owned banks operating in Germany, Akbank and Ziraat Bank, have come under fire from the German financial regulator (BaFin) over serious shortcomings in anti-money laundering (AML) controls, risk management and internal governance. 

The regulator has imposed capital requirements on both institutions and levied fines totalling €432,500 against Akbank, in one of the most sweeping actions it has taken against foreign-owned banks in recent months.

Multiple deficiencies 

BaFin has  Akbank to correct significant deficiencies in its business organisation and AML compliance, including customer due diligence, internal auditing and IT monitoring. 

These findings follow a special audit conducted in 2024, which discovered weaknesses across significant areas of the bank’s operations, including its risk compliance function, lending practices and documentation of business decisions.

As part of its enforcement action, BaFin appointed a special representative to oversee remedial efforts at Akbank, a similar process to which it has previously put in place at neobanks such as Solaris and N26.

It has also imposed additional capital adequacy requirements and fined the bank €432,500 for multiple regulatory breaches.

Among the most serious issues were failures in the bank’s financial crime prevention systems. 

The audit found inadequate staffing of the money laundering officer role, poor IT-based transaction monitoring and a failure to establish effective procedures for detecting and reporting suspicious activity, exposing the bank to potential insider trading and market manipulation risks.

BaFin also cited breaches under the German Securities Trading Act after the bank failed to inform customers it was retaining recorded phone calls for five years, as required.

Other violations included late submission of the 2023 annual financial statements and failure to notify the regulator about the outsourcing of its IT audit.

Risk management failures

In a separate but similarly tough action, BaFin has also  Ziraat Bank after finding that the institution’s risk management and internal controls fell short of regulatory expectations. 

As with Akbank, a 2024 special audit revealed the compliance failures and that the institution had not maintained a “proper business organisation” across all audited areas, in breach of local banking laws. 

BaFin ordered the bank to rectify identified deficiencies and comply with additional capital requirements to address elevated risks.

In a media , which the financial institution says “was deemed necessary” due to “the misleading and manipulative news circulating in various media regarding our subsidiary in Germany”, the bank has defended its actions. 

It says that it “is continuing its operations with utmost sensibility and in full compliance with laws and regulations. Additionally, the Bank is continuously working to improve its technological infrastructure to ensure it can meet the increasing requirements of the banking sector and auditing processes.”