Turkish banks’ ‘compelling potential drawing foreign investors’

LONDON

The valuation levels of Turkish banks continue to be attractive for foreign investors, spurring strong interest in the Turkish banking sector, according to an analyst.

This is evident by the two transactions completed in the last four months — the sale of Rabobank Türkiye to Rönesans Holding and the recent deal for Odeabank, the subsidiary of Lebanon’s Bank Audi in Türkiye, Gökhan Özkan, an official at JP Morgan, told state-run Anadolu Agency.

Abu Dhabi-based sovereign wealth fund ADQ last week acquired 96 percent of the share capital of Odeabank, and Özkan views the deal as a testament to the growing economic ties between Gulf states and Türkiye.

“The acquisition of Odeabank by ADQ reflects a strategic alignment where both regions see mutual benefits in collaboration,” said Özkan, managing director and head of Middle East, Türkiye, Africa FIG and EMEA Credit Management Services at JP Morgan.

“It signals confidence in the Turkish banking market’s compelling potential and a commitment to strengthening bilateral relations between the UAE and Türkiye.”

Özkan emphasized that this investment showcases ADQ’s confidence in Türkiye’s banking potential, with the country seeing steady economic growth in 2023, including a real GDP increase of 4.5 percent and nominal GDP surpassing $1.1 trillion.

“Banking sector performance is often seen as a proxy for the strength of an economy,” he explained.

Despite the volatility a few years ago, there has been a more stable economic environment and the country continues to present substantial long-term growth potential, he underlined.

“With the orthodox macroeconomic policies in place, Türkiye has once again become an attractive market for both debt and equity investors,” he asserted.

Odeabank’s acquisition is part of a broader trend where Gulf investors are increasingly looking to diversify their portfolios by tapping into emerging markets with strong growth prospects.

For ADQ, Özkan emphasized, this acquisition represents an opportune moment to enter the Turkish banking market.

“The close ties between Abu Dhabi and Ankara have certainly facilitated the process, creating a supportive environment for strategic investments,” Özkan said.

“This alignment of interests could allow ADQ to confidently expand its footprint in Türkiye’s banking sector, knowing there is a strong foundation of further mutual cooperation,” he added.