UniCredit agrees to cut stake in Yapı Kredi to below 32 percent

MILAN-Reuters

Italy’s UniCredit said on Nov. 30 it had reached a deal with Turkey’s Koç Holding to cut its stake in Yapı Kredi Bank to below 32 percent as part of moves to simplify its shareholding structure and bolster capital.

Yapi Kredi Bank is Turkey’s third-largest bank.

Under the deal Koç Holding will buy UniCredit’s 50 percent stake in Koç Financial Services (KFS), the joint venture which controls Yapı Kredi, to become the JV’s sole owner.

At the same time KFS will sell 31.93 percent of Yapi Kredı to UniCredit and 9.02 percent to Koç Holding.

KFS currently owns almost 82 percent of Yapı Kredi.

UniCredit, which will book charges of around 1 billion euros ($1.1 billion), said the overall impact of the deal for the bank would be virtually nil in terms of cash.

It said it expected its group CET 1 ratio - an indicator of financial health - to be lifted by an overall mid-single-digit basis point.

Completion of the transaction is expected in the first half of next year, UniCredit said.

The deal is the latest move in a string of disposals that UniCredit’s boss Jean-Pierre Mustier has embarked upon since taking the helm of Italy’s biggest bank by assets in 2016.