Turkish Islamic lender Bank Asya said an exclusive deal with Qatar Islamic Bank (QIB) to acquire a stake in the Turkish lender was annulled, opening the way for alternative suitors.

Bank Asya attempted earlier this year to form a partnership with QIB but sources close to the matter told Reuters last month that QIB and Bank Asya had ended the talks after a disagreement over price.

The Turkish lender said on Friday in a statement to the Istanbul stock exchange that the exclusivity deal with QIB, under which Bank Asya could not pursue an offer from another potential buyer, was terminated as of August 8 so it could receive formal bids from Turkish investors.

Deputy Prime Minister Ali Babacan said on Wednesday that state-run Ziraat Bank, which is looking to launch its own Islamic banking unit, could buy Bank Asya, but an advisor to Prime Minister Tayyip Erdogan later denied such a plan.

Babacan stood by his comments on Thursday, saying he had clearly explained developments regarding Bank Asya a day earlier and there was no new information.

Ziraat Bank is seen as the most likely partner for Bank Asya but the two banks have not officially begun talks, sources familiar with the matter said last month.

Bank Asya has seen its profits and capital base collapse since it found itself at the centre of a power struggle between Prime Minister Tayyip Erdogan and his former ally Fethullah Gulen, the Islamic cleric whose sympathisers founded the bank but has since become Erdogan's foe.

Gulen is now based in the United States but his Cemaat movement is still seen as a threat to Erdogan's increasingly authoritarian style of government.

State-owned companies and institutional depositors loyal to Erdogan have withdrawn 4 billion lira ($1.8 billion), or some 20 per cent of the bank's deposits, earlier in the year, according to media reports.

The bank's future looked dim after the authorities cancelled its tax collection and social security payment deals on Thursday - a sign according to observers that the government may be a step closer to winding down the lender.

The bank also said in a separate statement on Friday that it does not see a significant impact from the Social Security Institution cancelling its contract with the bank, effective Sept. 8. - Reuters