Commercial Bank, a leading Qatar-based international banking group, has announced the completion of its acquisition of a 70.84% shareholding in Alternatifbank (ABank) in Turkey from Anadolu Endustri Holding.
The completion follows regulatory approval both in Qatar and Turkey. Commercial Bank announced its intention to acquire a majority stake in ABank in March 2013. As part of the transaction, Commercial Bank will launch a mandatory tender offer to acquire the 4.16% of ABank’s shares that remain in the public domain. Details of the tender offer will be announced in due course.
The transaction is based on twice the book value as of June 30, 2013, and expands Commercial Bank’s international footprint to four regional markets. Anadolu will retain a 25% stake in ABank and have board representation.
ABank, a commercial bank focusing on small and mid-size enterprises (SMEs), is a mid-sized lender in Turkey with assets totalling 7.9bn Turkish liras ($4.4bn) at the end of 2012. “It provides a suitable entry point for Commercial Bank into a key strategic market with strong growth prospects and a fast-expanding banking sector”, said a bank statement.
The acquisition is an important step in Commercial Bank’s strategy to expand its footprint in retail and corporate banking outside the Gulf Co-operation Council (GCC) region. The bank’s international expansion strategy has focused, to date, on countries within the GCC.
In 2005, Commercial Bank successfully acquired minority stakes in National Bank of Oman (34.9%) and in 2008 in United Arab Bank (40%) in the UAE, and has forged successful alliances with these banks.
“This milestone deal represents one of Commercial Bank’s biggest investments, its first investment in Turkey and its first acquisition of a majority stake in another bank,” said the statement.
HE Abdullah bin Khalifa al-Attiyah, chairman of Commercial Bank, said: “We are delighted to have received regulatory approval for, and now completed, this very important transaction for Commercial Bank.
“As the trade and economic links between the GCC countries and Turkey grow ever stronger, and corporates become more active in their cross-border activities between the two markets, we feel the timing for our entry into the Turkish market is right. ABank is a highly-respected, growing bank and we are looking forward to welcoming the bank into the group to facilitate further growth for all of our alliance banks.”
ABank was established in 1991 and is now the country’s 17th biggest lender by assets with 69 branches in 25 cities across Turkey. On 31 December 2012, total loans stood at TL5.1mn, with customer deposits of TL4.2mn and shareholders’ equity of TL601mn. The bank posted a net profit after tax of TL81mn, up 290% from the prior year.
Turkey is the 18th biggest economy in the world and has enjoyed an average annual GDP growth rate of over 5% since 2002. Turkey and the Middle East have an increasingly close financial and economic relationship, with the Middle East and the Caucasus accounting for 28% of Turkey’s exports, twice the level of five years ago.
Exports from Turkey to Arab countries increased 11-fold in the last decade and imports from Arab countries grew 12-fold. The level of bilateral trade was nearly $50bn in 2012. Turkish investment in the Middle East North Africa region has grown from approximately $5bn to more than $34bn in just under a decade.
Hussain Alfardan, Commercial Bank managing director, said: “The management team from each of our four alliance banks have started to work together to ensure that our customers in each country, as well as our shareholders, see the benefits of our growing regional presence.
“Combining ABank’s extensive knowledge of the Turkish market with our existing operations in Qatar, the UAE and Oman will reiterate our position as one of the leading commercial banks in the region, and will also ensure we deliver the best results for all our stakeholders.”
Andrew Stevens, group chief executive officer of Commercial Bank, said: “We see the ABank acquisition as a very exciting opportunity for the whole Commercial Bank alliance of our customers, shareholders, employees and our other stakeholders in each market.”
Reported by: Caye Global News, Gulf Times
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