National Bank of Abu Dhabi PJSC plans to start trade finance and corporate banking operations in Turkey after the second-largest United Arab Emirates lender failed to find the right acquisition target.
“Turkey is a very important market for us,” Chief Executive Officer Michael Tomalin said on a conference call today. The Abu Dhabi-based lender, which is applying to set up an office in Turkey, plans to expand into the country “as a bank in trade finance, as a bank in capital markets, as an investment bank,” he said.
Foreign banks are seeking to boost their presence in the nation of 80 million amid government plans to turn Istanbul into a global financial center and make the nation’s economy one of the world’s 10 biggest by 2023. OAO Sberbank (SBER), Russia’s biggest bank, bought Denizbank AS for 6.47 billion liras ($3.6 billion) in June, while in 2011 Spain’s Banco Bilbao Vizcaya Argentaria SA (BBVA) paid $5.8 billion for 25 percent of Turkiye Garanti Bankasi AS, Turkey’s biggest bank by market value.
“Turkey is a market where you have to be big if you are going to be in retail,” Tomalin said. NBAD had the option to buy a bank with about 70 branches and opted not to because it would have struggled to compete with Turkish lenders operating 1,000, he said.
NBAD plans to enter Turkey “with our corporate, wholesale model, in other words where we can intermediate trade flows and capital flows between the Middle East and Turkey,” said Tomalin, who will retire in July.
Other banks in the Gulf Cooperation Council are also interested in expanding in Turkey. Qatar National Bank SAQ, the Middle East’s biggest lender by assets, said in December it would consider buying one of Turkey’s top 10 lenders as part of an expansion drive.
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