National Bank of Greece SA (ETE), the country’s biggest lender, plans to sell a stake in Istanbul-based Finansbank AS as demand for Turkish bank assets increases.
The bank expects to submit a restructuring plan later this year which includes the sale of a “significant” minority stake in Finansbank, according to a statement posted on the website of the Athens-based lender yesterday.
Foreign lenders are snapping up Turkish banking assets, as the effects of a December corruption probe which wiped as much as 6.1 percent off the Turkish banking index dissipate. China’s ICBC (1398) said last month that it will buy GSD Holding AS (GSDHO)’s 76 percent stake in Tekstil Bankasi AS for $316 million, while Qatar Islamic Bank is seeking a stake in Asya Katilim Bankasi AS.
“Market conditions have improved and getting banking licenses in Turkey is difficult, so there’s likely to be demand,” Alex Tsirigotis, an analyst at Mediobanca SpA, said today by phone from London. “We wouldn’t rule out a full trade sale if the right offer is made.”
On March 7, NBG said it would present a plan to address a capital shortfall without raising new equity. The Bank of Greece, which regulates the financial system, declined to accept that plan, according to two people with knowledge of the discussions with the commercial lender.
The Greek lender’s shareholders on May 9 approved a plan to raise 2.5 billion euros ($3.4 billion) through the sale of new shares priced at 2.2 euros apiece.
The capital increase came after the central bank in March told National Bank it needed to raise 2.2 billion euros following a review of its loan portfolio and stress test conducted by BlackRock Inc.
Finansbank contributed 1.1 billion liras ($531 million) to NBG’s 2013 profit, 9 percent lower than a year earlier, the bank said in a March 20 earnings conference call. NBG acquired Finansbank, Turkey’s seventh biggest bank by market value, in 2006.
While ICBC said it will pay $316 million for 75 percent of Tekstil, NBG may get a better price, according toHaydar Acun, an asset manager at Sardis Turkish equity fund. In ICBC’s case, “the buyer’s motive was to buy a bank license ticket to enter Turkey,” he said. “In Finansbank’s case, the buyer will buy into the bank’s prospects and future profitability.”
Finansbank’s shares rose as much as 3.3 percent and gained 1.3 percent to 3.12 liras as of 3:26 p.m. in Istanbul. National Bank of Greece shares fell 3.6 percent to 2.41 euros a share in Athens.
National Bank will face another stress test from the European Central Bank in October, which could identify further capital needs.
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