“When considering the current situation in Greece, it is very hard for banks to be cleared of debt losses with such high interest rates. This, of course, places a lot of pressure on Greek banks. EFG Eurobank has therefore decided to pull out from the Turkish market and clear the way for Eurobank Tekfen as it cannot provide the necessary support for the bank in such a growing economy,” Eurobank Tekfen Chairman Mehmet Erten told the Anatolia news agency on Tuesday.
“Currently, the bank’s [Eurobank Tekfen] book value is calculated as TL 613 million and from selling our 70.13 percent stake in the bank, we anticipate at least TL 430 million. However, I cannot give a specific number for our expectations. We will evaluate an accurate bid which means the sale of Eurobank Tekfen’s 70 percent will only go through when the necessary conditions are met,” Erten said.
If successful, the deal will be EFG’s second divestment outside Greece this year after the sale of a majority stake in its Polish operation Polbank to Austria’s Raiffeisen Bank in February for 490 million euros ($698 million). Erten underlined that the sale of a 70 percent share will mean Eurobank Tekfen will have a new major stakeholder in the bank and this may lead to changes in short and mid-term plans. “We plan to add two more branches this year to our existing network and 10 another in 2012. The new majority shareholder can accept our five-year plan but it can also implement its own growth strategy. Eurobank Tekfen will continue its operations in line with its short and mid-term plans until we sell our share,” Erten noted.
Greek banks, hit by the country’s sovereign debt crisis, have been boosting their capital base to cope with a protracted recession at home that has led to a rise in non-performing loans. Erten underscored that they are now under pressure to keep resources in Greece to help meet the country’s economic crisis.
Moreover, concerns that the eurozone’s sovereign debt crisis could spread to countries such as Italy and Spain has cast a shadow on the recovery process of the world economy, possibly paving the way for another global financial crisis. Commenting on this issue, Justice and Development Party (AK Party) deputy chairman and head of economic affairs for his party, Bülent Gedikli, stressed that every single person in Turkey should be ready for a worst case scenario in the economy.
“I need to be honest and therefore cannot tell people that everything is on track. Black clouds have been hanging over the world economy and another crisis is likely to occur soon. Turkey, of course, will be affected by this negative development; therefore I advise people to use their savings effectively. Do not spend too much,” he noted.
Eurobank Tekfen likely to see a foreign partner’
Erten said that Turkey has still an attractive banking sector for investors, especially from the Gulf region and the eurozone, adding that he expects bidders for Eurobank Tekfen’s 70 percent will likely to be from these regions. “I do not think that majority of bidders will be from one region. Turkey’s banking sector is continuously growing and this means the sale of EFG Eurobank’s share in Eurobank Tekfen will attract many investors. Many people ask me whether there are investors in Turkey who currently do not own a bank but want to enter the [banking] sector by way of an acquisition. I do not know the answer to this question but it is highly probable that Eurobank Tekfen’s next majority shareholder will be a foreigner,” the chairman of the bank stated.
EFG Eurobank bought 70 percent of Tekfenbank in 2007. The Turkish bank doubled its loan portfolio since then to 1.4 billion euros and now runs a network of 58 branches. Eurobank has operations in Bulgaria, Romania, Serbia, Cyprus, Albania and Ukraine. The group, with assets of 83.2 billion euros, employs 22,500 people and has a network of 1,600 branches. |
Source : todayszaman.com
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