Turkey Said to Hire Citi to Advise on Halkbank Unit Sales

Turkey hired Citigroup Inc. to advise on the sale of lender Turkiye Halk Bankasi AS’s non-life and private-pension units, three people with knowledge of the matter said.

The sale by the country’s largest publicly traded state-run bank could be completed before the end of the year, the people said, asking not to be named as the process is confidential. Halkbank, as the lender is known, directly owns 94 percent of the pension business and 89 percent of the non-life unit, according to regulatory filings.

The Ankara-based government agency in charge of asset sales, known as OIB, is selling the lender’s private pension fund and life insurance unit, Halk Hayat & Emeklilik AS, and non-life unit Halk Sigorta AS, the bank said in a filing.

Nevnihal Ciftci, a spokeswoman for Citigroup in Istanbul, declined to comment. An OIB spokesman, who asked not to be named because of corporate policy, declined to comment.

The sale could attract potential bidders including Talanx AG, Zurich Insurance Group AG and Sompo Japan Insurance Group Inc., two of the people said. Martin Schrader, a spokesman for Talanx, declined to comment. Zurich didn’t reply to e-mailed questions seeking comment.

“We expect Halkbank to cut a deal at least as successful as Yapi Kredi’s,” said Fatih Tugrul Topac, an analyst at BNP Paribas Istanbul-based unit TEB Investment, in an e-mailed note. Allianz SE, Europe’s biggest insurer, bought 94 percent of the private pension and non-life units from Yapi Kredi Bankasi AS last year for $987 million.

“Assuming a 5 times price-to-book value for the whole package, we roughly calculate a sale price of 1.71 billion liras which makes a capital gain of 688 million liras,” for Halkbank, Topac said.

American International Group, Inc., Aegon NV, AXA SA, Assicurazioni Generali SpA could also be interested, Topac said.

Halk Sigorta rose as much as 21 percent to 2.62 liras in Istanbul, the most in more than two years. Halkbank rose as much as 2.7 percent to 16.95 liras.

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