BBVA’s Garanti bid is risky, but has logic
Euromoney, is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024
Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement
Opinion

BBVA’s Garanti bid is risky, but has logic

Perhaps it is not such a strange time to bet billions on Turkey’s economy.

BBVA-Garanti-Turkey-billboard-iStock-960.jpg
Photo: iStock

Investors are alarmed at BBVA’s decision to double down on Turkey. The Spanish bank’s share price closed down 4% on November 15, when it announced it was launching a voluntary takeover bid for the 50.12% share it does not own in BBVA Garanti, Turkey’s biggest bank by market capitalization.

President Erdogan Tayyip Erdogan’s recent intervention at the central bank – and the attendant erosion of monetary stability – is obviously not a comfort. The lira has just hit yet another record low. Inflation is approaching 20%.

The Spanish bank could be getting a very good deal

Meanwhile, BBVA previously downplayed the prospects of a takeover bid for Garanti as a means to deploy $11.6 billion in cash it gained from selling BBVA USA to PNC in 2020.

No doubt BBVA’s chief executive Onur Genç has a better appreciation of the true picture in the country, given that he is Turkish, unlike executive chairman Carlos Torres Vila or indeed most BBVA shareholders.


Gift this article