Qatar National Bank SAQ (QNBK) is the last serious bidder for Turkey’s Denizbank AS (DENIZ) after the withdrawal of HSBC Holdings Plc (HSBA) and OAO Sberbank (SBER), people familiar with the process said, underscoring the difficulty banks face offloading businesses amid Europe’s sovereign debt crisis.
QNB remains interested in Denizbank, the Turkish unit of the Franco-Belgian lender Dexia SA (DEXB), and a deal could be reached this month if talks are successful, the people said. The parties may still fail to complete a deal, one of the people said, declining to be identified because the discussions are private.
Denizbank is the latest bank asset to struggle to find buyers as the region’s fiscal woes continue and some of the world’s largest financial institutions seek to raise cash by divesting units and portfolios. Lenders including Deutsche Bank AG and France’s Societe Generale SA have announced plans to shed more than $1 trillion in assets, according to Bloomberg data.
“You certainly have a deleveraging process going on across Europe right now, and it’s an accelerating process” as banks work to meet deadlines for raising capital later this year, said Matthew Czepliewicz, an analyst at Collins Stewart in London.
With few large financial institutions in a position to make major acquisitions, that leaves buyers who “aren’t the usual suspects,” such as Middle Eastern banks, among the only candidates willing and able to do deals, he added.
HSBC, based in London, has withdrawn its bid for Denizbank, people with knowledge of the process said yesterday, following a similar decision by Sberbank last month due to what it said were “uncertain market conditions.”
“No official information has come to us from the interested parties about reports and comments in the media,” Denizbank said in a filing with the Istanbul Stock Exchange today. “The sale process is continuing.”
Spokesmen for QNB, HSBC and Dexia declined to comment on the Denizbank process.
Denizbank shares rose 9.7 percent to 12.45 new Turkish lira at the close in Istanbul after dropping 1.32 percent earlier, giving it a market value of $4.7 billion. The bank’s shares have declined 22 percent since last year’s high of 16.05 Turkish lira on October 19. QNB shares dropped 5.2 percent to close at 145 riyals, the steepest fall in more than two years amid a broader slump on the Doha exchange.
The Turkish lender was put up for sale last autumn as part of a rescue plan undertaken by the French and Belgian governments for Dexia after the debt crisis reduced the bank’s ability to obtain funding. The Brussels-based firm is putting its most troubled assets into a so-called bad bank and trying to sell profitable units, including Denizbank, to raise cash.
Turkey has been a popular target for deals in recent years as foreign companies look to tap its $735 billion economy, which grew 8.2 percent in the third quarter of last year -- a pace faster than that of any Group of 20 country except China.
Still, even bank assets in faster-growing economies are more difficult to sell as buyers stick to the sidelines. Last month Banco Commercial Portugues opted to keep its Polish unit after initiating a sale process that people familiar with the process said had seen bidders drop out.
European banks will need to raise 114.7 billion euros in capital as part of measures introduced in response to the region’s sovereign-debt crisis, the European Banking Authority said last month, 8 billion euros more than the regulator had estimated in October.
The agency has given the region’s lenders until June 30 to increase core Tier 1 capital, a measure of banks’ financial resilience, to 9 percent as a buffer against the sovereign-debt crisis. The EBA set a Jan. 20 deadline for banks to submit money-raising plans to supervisors. Those that fail to raise enough capital on their own will have to turn to their governments or the European Financial Stability Facility, the euro region’s bailout fund.
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