Erdogan Adviser Says Turkey Should Consider Buying Deutsche Bankby
Plan would turn Germany’s largest lender into ‘Turkish Bank’
Wealth fund or state bank conglomerate could buy, Bulut says
Deutsche Bank AG’s crashing share price is prompting takeover speculation from unexpected places.
Yigit Bulut, a chief adviser to Turkish President Recep Tayyip Erdogan, said the country must consider using a new wealth fund or a group of state-owned banks to buy the Frankfurt-based company. Bulut made the proposal on Tuesday via his Twitter account, saying Germany’s largest lender should be made into a Turkish bank.
The stock of Europe’s biggest investment bank has slumped by more than 50 percent over the past year, falling to a record low on Tuesday, over concerns about its weakening financial position and penalties in the U.S. tied to mortgage-backed securities. Bulut’s comments come after Moody’s Investors Service on Sept. 23 cut Turkey to junk, citing slowing economic growth and deteriorating credit fundamentals.
"For months on TV programs, I’ve been calling on Turkey’s private and public capital: ‘Some very good companies in the EU are going to fall into trouble and we need to be ready to buy a controlling stake in them,’” Bulut wrote on Twitter. "Wouldn’t you be happy to make Germany’s biggest bank into Turkish Bank!!"
The suggestion may ignite political opposition in Germany, where Deutsche Bank -- for all its troubles -- has long been viewed as a national champion and has played an integral role in Germany’s economy.
Turkey’s financial industry, long viewed as a source of strength for the $700 billion economy, has suffered some loss of market confidence over the past few years.
The market capitalization of the country’s publicly traded lenders stands just above $49 billion, roughly the size of General Motors Co. and about half what it was in 2013, while that of Deutsche Bank is almost $17 billion. Banking assets in the country amounted to about $836 billion at the end of July, while Deutsche Bank had total assets of 1.63 trillion euros ($1.83 trillion) at the end of last year.
In an interview with Bloomberg on July 24, Turkish Prime Minister Binali Yildirim announced that the government was planning to form a wealth fund to finance investments in infrastructure mega-projects, stabilize markets and keep growth on track. The fund could be as large as $200 billion, Maritime and Communications Minister Ahmet Arslan said in August, without providing details on where its money would come from.
"Turkey’s sovereign wealth fund is still in the works, but the critical problem at this stage is that while it is ‘sovereign,’ the key bit it lacks is the ‘wealth,’" Timothy Ash, a credit strategist at Nomura International Plc in London, said in an e-mail on Wednesday. "I am not sure that Turkey’s state-owned banks would want to be saddled with Deutsche Bank’s balance sheet at this stage -- they possibly have enough problems/challenges with their own in the context of the domestic growth slowdown."