HSBC Said to Approach Garanti, Yapi as Talks With ING Stall

HSBC Holdings Plc has approached Turkish banks to gauge interest in its local unit after talks with ING Groep NV stalled, people with knowledge of the matter said.

The British bank has contacted the owners of Garanti bank and Yapi Kredi, said the people, who asked not to be identified because the talks are private. HSBC is offering to sell the unprofitable Turkish unit for a price that represents about 50 percent of its book value, they said. The division had a book value of about 2.9 billion liras ($970 million) at the end of June, according to company filings.

ING may need more time to mull a purchase, people familiar with the situation said earlier this week. Turkish parties’ failure to broker a coalition after inconclusive general elections in June has compounded a rout in the country’s markets, helping wipe 24 percent off the XBANK banking index this year.

The agreement with ING and HSBC may also have been delayed as the banks examine the potential fallout from a European Court of Human Rights ruling against the Turkish state, Milliyet newspaper reported. A suit was brought by the former shareholders of a local lender that HSBC bought in 2001 from a state body that seized bad banks.

HSBC’s Turkish division, which has about 291 branches, had a second-quarter loss of 23.5 million liras, down from a loss of 47 million liras a year earlier, company filings show.

Officials at Banco Bilbao Vizcaya Argentaria SA, which controls the largest stake in Garanti, and HSBC declined to comment. A spokesman at UniCredit SpA, which owns Yapi Kredi through a joint venture with Koc Holding, declined to comment. An official at Yapi Kredi also declined to comment. An official at Koc didn’t immediately respond to e-mails seeking comment.

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