Turkey’s Bank Asya Ends Talks With QIB Without Agreement

Asya Katilim Bankasi AS (ASYAB), the Istanbul-based lender known as Bank Asya, said exclusive partnership talks with Qatar Islamic Bank SAQ ended amid comments from Turkish officials that a local buyer is preferred.

Negotiations finished to allow Bank Asya to meet other investors for partnership talks and potential bids, the lender said today in a regulatory filing. Goldman Sachs Group Inc. (GS) will continue to advise Asya on finding a buyer, Cengiz Onder, the bank’s head of investor relations, said by phone from Istanbul.

Bank Asya was founded by followers of Fethullah Gulen, the U.S.-based Islamic cleric blamed by Prime Minister Recep Tayyip Erdogan for the corruption probe that implicated members of his cabinet last December. Following the withdrawal of deposits from the bank by companies including Turkish Airlines, which is 49 percent state-owned, deposits fell 18 percent to about 14 billion liras ($6.4 billion) in the first quarter.

The breakdown in talks follows comments two day ago by Deputy Prime Minister Ali Babacan, responsible for banking and the Treasury, that the government would welcome the purchase of Asya by state-owned TC Ziraat Bankasi AS. Hurriyet newspaper reported in June that Ziraat was interested in buying Asya.

Babacan’s comments were later contradicted by Yigit Bulut, chief economic adviser to Erdogan, who said that the state wouldn’t consider buying a bank with 2.8 billion liras of non-performing debt, according to televised comments on the Sky360 news channel on Aug. 6.

Trading Suspended

Borsa Istanbul suspended Bank Asya trading during the midday break yesterday after it plunged as much as 9.2 percent following Bulut’s comments. The stock declined 14 percent this year, compared with a 19 percent gain in the 16-member banks index. A higher proportion of the bank’s shares are publicly traded than of any Turkish bank.

Contradictory statements from officials have “turned the shares of a publicly traded company to an elevator,” Faik Oztrak, the deputy chairman of opposition Republican People’s Party, said in an e-mailed statement. Oztrak said the Prime Minister and his adviser were “politically lynching” the bank.

Erdogan’s press secretary, Lutfullah Goktas, didn’t immediately respond to e-mailed questions.

Ak Investment, the brokerage arm of Akbank TAS (AKBNK), withdrew its market perform rating on Bank Asya today. The rating was lifted “due to lack of public information” regarding a possible sale, analyst Hakan Aygun said in an e-mailed report.

Asya said today it hadn’t received any other partnership offers while it was in exclusive talks with QIB. The bank hired Goldman Sachs to help find a buyer on June 11.

The speculation around Bank Asya “is part of a general campaign to discredit and undermine Gulenist businesses” said Sinan Ulgen, the chairman of the Center for Economic and Foreign Policy Studies in Istanbul in an interview in Istanbul. “This is not a fight that will be over soon.”

To contact the reporter on this story: Isobel Finkel in Istanbul at ifinkel1@bloomberg.net

To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net Simone Meier

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