Turkish Islamic lender Albaraka Turk has priced its initial public offering at 4.1 lira a share, at the top of an initial range, valuing the bank at around $840 million, it said.

Domestic demand for the IPO was 60.4 times the shares on offer, while foreign institutional demand was 21.3 times supply, making for a total oversubscription rate of 32 times, the bank said, confirming an earlier report.

The initial price range was 3.6-4.1 lira for the 20.57 per cent stake which is being listed, including a greenshoe over-allotment option.

Albaraka, a unit of Bahrain-based Albaraka Banking Group, is the smallest of Turkey's Islamic banks, which are enjoying strong growth from a low base in Turkey.

The lenders do not charge interest, in line with Islamic law, but share out profits among depositors.

The four banks making up the sector saw total assets grow 38 per cent last year and net profit rise 56 per cent, according to data from the Participation (non-interest) Banks Association.

The sector is particularly in focus as the owners of larger Islamic lender Turkiye Finans are in talks to sell half the bank, most likely to an institution in the Gulf, which is an Islamic banking hub.

Shares in rival Bank Asya have more than doubled since its offering last year, far outperforming the wider banking sector.

Turkey, which is seeking European Union membership, is enjoying high economic growth and foreign direct investment after a deep financial crisis in 2001.

Sixty-three per cent of the Albaraka offering was allotted to foreign investors and 37 per cent to domestic investors and the stock is due to start trading on Friday, the bank said. Reuters