Foreign lenders seek a slice of Turkish banking
Lucrative stakes in Turkey’s Akbank and Finansbank have been added to the for-sale list, while Dexia approaches a deal with Russia’s Sberbank to sell Denizbank. With EFG Eurobank leaving the Turkish market to Kuwait’s Burgan Bank and Lebanon’s Bank Audi establishing a unit in Turkey, the trend is hard to ignore: Arab investors have discovered Turkish banking.
With the European Central Bank’s long-term refinancing operation running out of steam and Greek politics dragging the eurozone into new turmoil, EU policymakers and banking executives might have too much trouble on the domestic front to ponder what is happening elsewhere. However, the eurozone crisis is having a profound effect on Turkey’s banking sector, known for its high growth potential, strong fundamentals and iron-fisted regulators.
The first sign came in October 2011 when French-Belgian lender Dexia put Denizbank, its profitable Turkish retail bank, up for sale. That was part of a steep price to be paid as Belgium, France and Luxembourg provided a €90 billion 10-year guarantee to cover Dexia’s funding needs, in effect bailing it out for the second time since the global financial crisis began.
While talks between Dexia and potential buyers – including Qatar National Bank and Sberbank of Russia – have dragged on, another eurozone lender has left the Turkish scene: EFG Eurobank Ergasias, the second-largest Greek bank, sold its 70% stake in Eurobank Tekfen to Burgan Bank, the commercial banking arm of Kuwait Projects Co, the Gulf nation’s biggest investment firm. Burgan promptly acquired the rest from Turkey’s Tekfen Holding, paying $357 million for the whole.