Emirates NBD in discussion to buy Turkey's Denizbank
Published: Tue 30 Jan 2018, 6:54 PM
Last updated: Tue 30 Jan 2018, 9:02 PM
Emirates NBD, Dubai's largest bank, said on Tuesday it had started initial strategic discussions with Russia's Sberbank about a possible purchase of Sberbank's stake in Turkey's Denizbank.
In a statement, Emirates NBD said it routinely evaluates potential opportunities in different markets and that discussions with the Russian bank are at "a very preliminary stage" and there is no certainty that any transaction will be entered into.
"A further announcement will only be made if there is a material development," Dubai's largest lender by assets said. With total assets of Dh470.4 billion, Emirates NBD group, which has a significant retail banking franchise, currently has 230 branches in the UAE and overseas.
Emirates NBD, which acquired BNP Paribas' Eygptian banking business in 2013, has been scouting for opportunities in the Turkish banking sector for several years as part of its international expansion.
In 2017, after opening its first branch in India, the bank said it would grow its branch network in Egypt and Saudi Arabia and open a representative office in Turkey in 2018.
The bank recently posted a 17 per cent rise in fourth-quarter net profit. Moscow-based Sberbank has been evaluating opportunities to sell its 99.85 per cent holding in the Turkish lender. Banks from the Gulf, including Emirates NBD, and China were among those interested. Sberbank, Russia's biggest bank by assets, bought Denizbank in 2012 for around $3.5 billion as it was trying to establish a presence abroad. "Work on the sales process has been accelerated. Potential buyers have expressed their interest to the bank," one of the sources close to the matter was quoted as saying by Reuters. "Sberbank wants to exit. We know that Emirates NBD is among those interested, a bank from Kazakhstan as well," another source knowledgeable about the issue said.
Denizbank shares were up 13.71 per cent at 4.81 lira at the market close. Emirates NBD Group has operations in the UAE, Egypt, Saudi Arabia, India, Singapore, the UK and representative offices in China and Indonesia.
As early as 2013, Emirates NBD and Sberbank signed a Memorandum of Understanding at St.-Petersburg International Economic Forum. The MoU reiterated both parties' intention to develop the cooperation across various business lines, including debt capital markets, investment banking, corporate banking, credit lines, trade finance, correspondent banking.
The Dubai-based bank said the MoU represented a key milestone in what it expect would be a strong, diverse and long term relationship spanning diverse areas of cooperation. "The cooperation and relations between Emirates NBD and Sberbank represents a natural alliance between the two institutions which are considered as the leading financial services powerhouses in their respective home markets. We consider Russia and CIS an attractive and important growth market, and we will continue to work closely with our valued partners like Sberbank in acting as an intermediary and financial conduit, bringing together clients and investors from the Middle East and Russia and CIS." - firstname.lastname@example.org