When Banco Comercial Português paid just over $3 million to buy a bankrupt bank from the Turkish government two years ago, it was snapping up probably its biggest bargain ever without knowing it.
"It all started with a coincidence," says Tezcan Yaramanci, chairman of BankEuropa, the brand name under which BCP is operating its acquisition.
Yaramanci, a former chairman of Turkish Airlines and former privatization administration chief, was having dinner in Athens with a Greek friend, Dimitri Kontominas. Kontominas told Yaramanci that he had formed a 50/50 joint venture with BCP, and set up a bank, Novabank.
The following day Yaramanci toured some Novabank branches. "I was very impressed," recalls Yaramanci. "It was the sort of bank I would want to be a client of. I asked my Greek chum: why don't we introduce the same concept to Turkey?"
Yaramanci returned to Istanbul and started looking around the shattered banking sector. "We chanced upon Sitebank," he says. "The shareholder asked for a vast sum. The bank was going bust but she was not aware of it - which goes to show you what kind of people owned banks and why so many of them went bust. 'Madam let me do you a kindness,' I said to her when it became certain that we could not agree on a price. 'The bank is in big trouble. Watch out.' She took this as an insult. Three months later Sitebank sank."
In July 2001 Sitebank was seized by state-owned deposit insurance agency TMSF and it became public knowledge that the bank had a $53 million hole. The shareholder had demanded $30 million from Yaramanci. Novabank paid TMSF $3.2 million for a $10 million balance sheet. Probably just the bank's headquarters in the prestigious Macka district are worth as much.
"BCP was informed but this was not really a BCP operation," says Yaramanci. "It was a Novabank operation." But a few months later BCP bought out Novabank's Greek shareholder and "found [the Turkish] business in its lap". A few months later BCP chairman Jorge Manuel Jardim Gonçalves paid his first trip to Istanbul: "Expecting to find a place like Cairo or Aleppo," says Yaramanci. Istanbul amazed Gonçalves and despite the recession he did not fail to see the potential. "By coincidence they made the right move," says Yaramanci with a broad smile.
BCP is making a modest start in Turkey, with 10 branches in Istanbul and one each in Izmir and Ankara.
BankEuropa is cloned from Private Bankers, the most exclusive brand in BCP's Portuguese stable, which serves high-net-worth individuals. Its Macka branch, silent as a tomb, looks more like a discreet boutique than a bank, with room-sized cubicles where each customer gets personal attention from specialized bankers.
BankEuropa will cater for well-heeled Turks but not necessarily just millionaires. "Everyone always rolled out the red carpet for millionaires in Turkey," says Yaramanci. "Those who have savings from $50,000 to $1 million also have a right to red-carpet treatment."