Turkey: ING joins Turkish banking fray
Foreign bank interest in Turkey’s fast-growing banking market shows no sign of slowing down, with ING of the Netherlands the latest new entrant into the country’s increasingly cosmopolitan financial services sector. In June, ING signed a contract with the Armed Forces Pension Fund (Oyak), to acquire its subsidiary, Oyak Bank.
Under the terms of the agreement, ING will buy 100% of Oyak Bank for $2.67 billion in cash, equating to a price to book multiple of 3.26. ING was advised by Citi, and Oyak by Morgan Stanley.
Commenting on the purchase, Michel Tilmant, the chairman of ING Groep’s executive board, says: "The acquisition is in line with our strategy of supporting the strong organic growth of the group with suitable add-on acquisitions and will provide ING with a solid banking platform with significant further growth potential." He adds that in order to boost Oyak Bank’s market share from 3% to 5%, ING will increase the bank’s annual marketing spend from €5 million to €20 million, increase investment in information technology from €25 million to €40 million and expand the branch network from 360 to 450. "We expect to improve Oyak’s cost-income ratio and profitability very quickly.