Citigroup Inc., the third-biggest U.S. bank, will sell its consumer banking unit in Turkey to OAO Sberbank, Russia’s largest lender, as it withdraws or scales back operations in some emerging markets.
The transaction, subject to regulatory approval, is expected to be completed in the third quarter, Denizbank, the Turkish unit of Sberbank, said in a filing to the Istanbul stock exchange today. The price will be announced later, it said. The unit may be valued at about $270 million, a person who asked not to be identified because the sale talks were private, told Bloomberg last month.
Citigroup will sell or shrink consumer banking operations in Turkey, Pakistan, Romania, Uruguay and Paraguay as it cuts costs under new Chief Executive Officer Michael Corbat, it said in December. The New York-based lender will continue commercial and corporate banking activities in Turkey, country chief Serra Akcaoglu said in an e-mailed statement today.
The unit in Turkey had 1.2 billion liras ($672 million) of assets, 1.5 billion liras of deposits and more than 600,000 clients at the end of last year, Denizbank said. Citigroup owns 37 branches.
Sberbank bought Denizbank last year, paying Belgium’s Dexia SA 6.47 billion liras, seeking growth outside of the former Soviet Union as some western European lenders sell their subsidiaries in Eastern Europe to comply with capital rules or state aid conditions. Sberbank also bought most of Oesterreichische Volksbanken AG’s eastern European business for 505 million euros in February 2012.
Citigroup Inc. sold a 10.1 percent stake in Turkey’s Akbank TAS for about $1.15 billion in May 2012 in efforts to to meet capital requirements. As part of the sale, Citigroup kept its remaining 9.9 percent stake in the Istanbul-based bank for three years.
Denizbank jumped 11 percent to 11.70 liras at 12:15 p.m. in Istanbul, valuing the company at 8.38 billion liras.