The bank, which is the Turkish arm of Bahrain-based Islamic lender Al Baraka, sold its first Islamic bond in the international market last April, a $200 million, 10-year deal which drew strong demand from investors in the Gulf.
Plans to issue more Sukuk later in 2013 did not materialise, as the global market environment worsened with the prospect of the US central bank winding down its monetary stimulus programme, and as Turkey's lira tumbled, losing 17 percent against the dollar last year. Many Turkish banks put bond issuance plans on hold as a result.
But Mustafa Cetin, head of the financial institutions business at Albaraka Turk, said the bank expected a window of opportunity for new issuance to open in the coming months.
"We would like to see reasonable market conditions, and we are ready to issue when we have them," Cetin said in an interview this week.
International issuance costs for Turkish banks have been driven up in recent months not only by global trends but by instability in Turkey's financial markets amidst investment capital outflows and a corruption scandal in the government.
Cetin said he expected this instability to ease in the coming months, as elections scheduled for this year resolved political uncertainty and as a lower lira exchange rate eventually reduced Turkey's trade deficit, which is seen by credit rating agencies as a major economic weakness.
Potentially weakened by the scandal over state procurement practices, Turkish Prime Minister Tayyip Erdogan's AK Party faces local elections in March and presidential polls in August.
The scandal has worried foreign investors but Turkish companies have retained access to the international debt market and Erdogan, facing only a weak and divided opposition, is widely expected to stay in power.
CAPITAL
Albaraka Turk's debut Sukuk last year broke new ground; it was the international market's first Sukuk based on the murabaha structure, a cost-plus arrangement. The issue boosted the bank's Tier 2 capital, raising its capital adequacy ratio to 15.6 percent from 13.03 percent.
Cetin said it was "90 percent" likely that Albaraka Turk's next Sukuk issue would be based on an ijara structure, which involves leasing an asset; it is the most commonly used structure in the market.
Albaraka Turk compensated for its lack of a second Sukuk issue in 2013 by obtaining a syndicated Islamic financing facility arranged by Gulf banks last September. The facility was worth $430 million, expanded from an original target of $250 million.
But all of Turkey's Islamic banks are likely to need additional funding and fresh capital in the next few years to support rapid growth. Cetin said Albaraka Turk's assets and number of branches were growing by between 20 and 25 percent a year.
In 2012 Turkey's Islamic banks, known locally as "participation banks" because of political sensitivies in the constitutionally secular country, held a combined $36 billion in assets, representing 5 percent of total banking assets. That was up 25 percent from the previous year, compared with 13 percent growth for conventional banks.
A Thomson Reuters study released last October estimated Islamic bank assets could hit $80-120 billion by 2017; the lower number would represent 9 percent of total banking assets, on track to meet a government target of 15 percent by 2023.