Turkish President Recep Tayyip Erdogan said the Treasury would take over Istanbul-based Isbank, sending the private lender’s shares plunging.

The main opposition party CHP holds about 28 per cent of Isbank’s shares, the nation’s largest listed bank by assets.

“This parliament will make this historic decision, with God’s permission,” Erdogan told his ruling AK party’s parliamentary faction in Ankara on Tuesday.

Erdogan is seeking to take over the bank after the CHP resisted his demand to give up its stake. Erdogan has also urged the opposition party to give up its four seats on the lender’s board.

The CHP was established by Mustafa Kemal Ataturk, the founder of modern Turkey, and it inherited the shares from him.

AKP lacks the parliamentary majority needed to change the laws unilaterally but Erdogan suggested its junior partner in the assembly, the nationalist MHP, would support his legislative efforts to enable the Treasury’s takeover.

Isbank shares fell as much as 6 per cent on Erdogan’s comments and were trading 2.3 per cent lower as of 12.50pm in Istanbul. The lira also trimmed gains and was trading 0.1 percent higher at 5.2098 per dollar at the same time.