Qatar National Bank to buy Turkey’s Finansbank for $2.95 bln

DUBAI/ATHENS

Finansbank headquarters is pictured in Istanbul, Turkey, December 22, 2015. REUTERS photo

Qatar National Bank (QNB), the Gulf Arab region’s largest bank, has agreed to buy Turkey’s Finansbank from the National Bank of Greece (NBG) for 2.7 billion euros ($2.95 billion), as it steps up its search for larger markets overseas. With the latest acquisition, Qatari companies have strengthened their hands in the Turkish market. 

The Greek bank had to put its Turkish subsidiary up for sale to plug a capital shortfall identified by European Central Bank (ECB) stress tests in October.

“This transaction is a significant milestone in QNB’s vision to becoming a MEA [Middle East, Africa] icon by 2017 and a leading global bank by 2030,” QNB Chief Executive Ali Ahmed al-Kuwari said in a statement on Dec. 22, as quoted by Reuters. 

As part of its aim to overtake the region’s top lender, Africa Standard Bank, it bought Societe Generale’s Egyptian business for $2 billion in 2013, and last year acquired a 23.5 percent stake in pan-African lender Ecobank International, as reported by Reuters. 

Finansbank is the fifth largest privately owned bank by assets, deposits and loans in Turkey and has one of the highest capital adequacy ratios among Turkish banks.

NBG, 40 percent owned by the country’s bank rescue fund, said the sale price implied a price-to-tangible book value of around 1, representing a premium to average market value of Turkish banks. The Greek bank will use the proceeds to pay back 2 billion euros of aid from the Hellenic Financial Stability Fund, cutting its annual costs by 150 million euros. It will also reduce its reliance on the more costly emergency liquidity assistance from the Greek Central Bank.

QNB said it will finance the purchase of the 99.81 percent stake through its own funds and will remain strongly capitalized after the acquisition, as reported by Reuters. The bank had a total capital adequacy ratio of 14 percent at the end of September. 

Rising Qatari interest in Turkey 

The deal also reflects Turkey’s increasingly close relationship with Qatar. 

QNB said in the statement that trade with Turkey across the Middle East and North Africa region has risen nearly tenfold from 2000 to $52.2 billion in 2014, as quoted by Agence France-Presse. 

Qatari media group beIN said it completed the takeover of Turkish satellite network and pay-tv provider Digitürk, citing a July 13 statement from the company, but no sale amount was disclosed. 

Mayhoola for Investments, an investment vehicle backed by a private investor group from Qatar, has also announced it would take a 30.7 percent stake in Turkish retailer Boyner for 885 million Turkish Liras.