National Commercial Bank to buy 60pc stake in Turkiye Finans

JEDDAH — The National Commercial Bank (NCB) is to acquire a 60 per cent stake in Turkiye Finans Katilim Bankasi, Turkey's major participation bank, from preeminent Turkish groups Ulker and Boydak.

By Habib Shaikh

Published: Fri 10 Aug 2007, 9:54 AM

Last updated: Mon 2 Sep 2024, 2:36 PM

Ulker and Boydak groups will each retain a 20 percent interest in Turkiye Finans and will remain strategic shareholders of the bank. The transaction is subject to regulatory approval and is expected to be completed by the end of 2007.

NCB said that through this agreement, it acquires control of the market leader in the rapidly developing participation banking sector in a large and fast growing market. It explained that Ulker and Boydak groups are among the preeminent industrial concerns in Turkey. NCB's Interest-free banking expertise in Saudi Arabia combined with Ulker and Boydak groups' extensive business presence in the Turkish market will accelerate Turkiye Finans' development, and expand its offering to a wide spectrum of high quality Interest-free banking products and services to both businesses and retail customers.

"Joining forces with Turkiye Finans marks another milestone in our strategy to further develop our banking business and a major step towards executing our regional expansion strategy. The cooperation is another example of the mutually-beneficial relationship between Turkey and the Kingdom," NCB Chairman Abdullah Bahamdan said in a statement made available to Khaleej Times here recently.

"We have witnessed a highly talented and motivated team at Turkiye Finans over the past months. I have the highest confidence in their ability in continuing to drive the business. I look forward to providing every support to pursue success going forward," said Abdulkareem Abu AlNasr, NCB CEO.

"NCB's interest in Turkiye Finans is a testimony to the work accomplished since the creation of Turkiye Finans in 2005 which has established the bank to be the leader of Turkey's participation banking sector. NCB's Interest-free banking expertise and broad product offering will further accelerate Turkiye Finans' development," said Turkiye Finans' Chairman Mustafa Boydak.

In 2006, Turkiye Finans made profits of $97 million and at the year end it had total assets of $2.9 billion. Similarly, NCB announced a net profit of $1.67 billion in 2006, an increase of 25 per cent over the same period in 2005 ($1.33 billion). Total assets amounted to $41.5 billion, making NCB the largest bank in Saudi Arabia.

Turkiye Finans Katilim Bankasi, established through a merger of Anadolu Finans and Family Finans in 2005, is Turkey's largest participation bank by total assets and branches and Turkey's most profitable bank by return on equity. The bank provides banking services to more than 156,000 retail and credit card customers and 30,000 commercial clients.

HSBC Bank PLC through its investment banking offices in London and Istanbul acted as sole financial advisers to the Ulker and Boydak groups throughout the entire transaction. Goldman Sachs International and NBK Capital advised NCB.