ING ‘drops plan to buy HSBC’s Turkish unit’

ISTANBUL

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ING Groep NV, the largest Dutch financial services company, has abandoned a plan to acquire HSBC Holdings Plc’s unprofitable Turkish unit, Bloomberg reported on Dec. 16.

Regulatory hurdles contributed to the decision, Bloomberg reported, citing two people with knowledge of the matter. 

HSBC was near to a sale agreement with Amsterdam-based ING in the summer, only for that process to stall, people familiar said in early September. The impasse prompted HSBC to re-approach Turkish banks including Garanti and Yapı Kredi to gauge their interest, the people said, as reported by Bloomberg. 

Reuters, citing sources, reported in November that Turkey’s Fibabanka has joined the ranks of banks interested in buying the Turkish unit.

Sources told Reuters late in August that HSBC was dragging its feet on the sale of its Turkish business to ING as the bank is no longer in a hurry to exit Turkey after securing a hefty $5.2 billion for its Brazilian unit.

HSBC, Europe’s largest bank, has around 300 retail branches and corporate and investment banking operations in Turkey. The Turkish business lost $64 million last year following a $155 million hit at its retail arm after regulatory changes capped interest rates on credit cards and overdrafts.

HSBC agreed to sell its Brazilian unit to Banco Bradesco SA for $5.2 billion in cash earlier this year, as part of its plan to cut costs.