Turkey’s Denizbank AS, owned by Russia’s OAO Sberbank, submitted the sole offer for Citigroup Inc.’s Turkish retail unit after rivals decided against bidding for the assets, two people familiar with the matter said.
Odeabank, the Turkish unit of Lebanon’s Banque Audi SAL-Audi Saradar Group, is among banks which decided the business lacked scale and chose not to bid for the 37 branches, one of the people said, asking not to be named as talks are private.
Citigroup said Dec. 5 it would sell or scale back consumer operations in Turkey, Pakistan, Romania, Uruguay and Paraguay as the New York-based bank cuts costs under new chief executive officer Michael Corbat. It said commercial and corporate-banking services in Turkey will continue. Adam Castellani, a spokesman for the bank in London, wasn’t immediately available to comment.
“Citi really just wants to exit and go,” said Ovunc Gursoy, an analyst at Yapi Kredi Yatirim Menkul Degerler in Istanbul. “The retail unit is not exactly a profitable business either. Citi may be satisfied if it gets just book value.”
Turkiye Garanti Bankasi AS, the country’s largest bank by market value, denied reports last month that it was involved in the bidding. The Citigroup consumer unit wasn’t large enough for HSBC, Sabah newspaper cited Martin Spurling, chief executive officer of its Turkey unit, as saying last week.
Citigroup’s retail unit in Turkey may be valued at about $270 million, according to one of the sources.
Investors from the Middle East, Russia and Asia are seeking to boost their presence in Turkey with acquisitions and licenses. Commercial Bank of Qatar QSC, Qatar’s second-largest bank, said last week it agreed to buy a 70.8 percent stake in Turkey’s Alternatifbank AS at two times book value. The Middle East’s biggest lender, Qatar National Bank SAQ, said in December it may target stakes in Turkey’s major banks. Dubai-based Emirates NBD PJSC has also expressed interest in acquisitions.
Denizbank gained 0.9 percent to 10.70 liras today at 10:46 a.m. in Istanbul.
Sberbank bought Denizbank in June last year for $3.8 billion or 1.3 times book value. Sberbank shareholders have voiced concerned whether the Citigroup deal is needed after last year’s Denizbank acquisition, one of the people said