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A new partner of Eurobank Tekfen, Eurobank’s subsidiary in Tukey, might be from the Gulf or Europe, according to lender’s chairman. Despite claims, a Turkish partner is unlikely, Erten says, adding that the bank will continue its current plans
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Turkish bank Eurobank Tekfen is seeking a new international partner after Greek stakeholders decided to sell the country’s 70 percent stake in the lender, according to its chairman.
Acquisition bargains will be made over the bank’s 613 million Turkish Liras of equity capital, Chairman Mehmet Erten told Anatolia news agency in a recent interview, adding that a new controlling partner could come from the Gulf countries or Europe.
“I do not think that the interest [in acquiring the bank] is from a particular region. This is a growing sector with opportunities. There is still a long way to walk in banking. Thus, I think they will reach a concrete point with one of the interested companies,” he said.
Eurobank Tekfen, a joint bank between Turkey’s Tekfen and Eurobank EFG, has been the second-largest lender in Greece.
When asked if any domestic groups had expressed interest in joining Eurobank Tekfen, Erten said none had so far. “If you ask me, the new partner will be from outside of Turkey.”
The chair added that since Turkey’s banking regulator does not grant licenses for new lenders, it will be easier to sell an already-existing bank.
On Friday, Eurobank EFG pledged to boost its capital after failing European Union-wide bank stress tests. The bank said in a statement Thursday reported by Agence France-Presse that it was “reviewing strategic options in Turkey” and “having preliminary discussions on a transaction involving a controlling stake in Eurobank Tekfen.”
Sharp fall in profits
In May, EFG Eurobank said its first quarter profit dropped by 80 percent due to rising loan losses and a one-time tax charge. Still, it had said it planned to strengthen its presence in Turkey.
Greece’s bank will not sell stake unless a good price is offered, Erten told Anatolia. Eurobank EFG has decided that it will not be able to support a local subsidiary sufficiently in a country with rapid growth, he added.
The parent company’s May statement said the bank’s new European operations, including Bulgaria and Romania, have bottomed out and will see improved earnings in the coming quarters. In February the bank sold a majority stake in Polish subsidiary Polbank to Raiffeisen Bank.
According to Erten, these European banks were paying salaries and providing services for the retired in Greece, responsibilities usually undertaken by state banks.
Plans may change
Due to the debt crisis in Greece, all Eurobank subsidiaries have to stand on their own feet, Erten said. “Still, we [in Turkey] were already acting that way. This new situation did not bring much change for us.”
The new lender controlling the majority of stake in the Turkish branch might have different expectations from the Greek owner, the chairman said.
“We will continue our activities as they are in this transition period. We will do whatever our budget and business plan says.”
The Turkey unit will open one or two branches this year, and plans to launch 10 more next year, Erten said. “A new partner may demand approving or changing our current plan for the next five years.”
Eurobank Tekfen was founded in 1989 under the name of Tekfen Yatırım ve Finansman Bankası. In 2001, it acquired Bank Ekspres, a mid-sized trade bank as a part of its growth plan. In 2006, the majority of shares in the bank were acquired by Eurobank EFG while Tekfen kept 30 percent of the shares. In 2008, the name of the bank was changed to Eurobank Tekfen after the banking regulator approved the acquisition.
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Source : hurriyetdailynews.com
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