Sale of Credit Europe Bank could be early bird of Turkish capital fleeing Russia

By bne IntelliNews February 9, 2016

The rapid deterioration of Russian-Turkish relations is forcing Turkish bank owners to cut their presence in Russia or even quit the market, Kommersant daily reported on February 9, adding that the country's largest lender with Turkish capital, Credit Europe Bank is up for sale.

Relations with Turkey – one of Russia's largest trading partners and a major buyer of Russian gas – "have hit their lowest point in decades", Kremlin press secretary Dmitry Peskov said on February 9, while adding that "it was not Russia's fault". Ankara's air force shot down a Russian bomber by the border with Syria last November, drawing an angry backlash by Moscow with economic sanctions, and prompting Turkish businesses to scale back their Russian presence.

According to Kommersant sources, Morgan Stanley has since mid-January been seeking a buyer for Credit Europe, the final beneficiary of which is Turkish businessman Husnu Mustafa Ozyegin.

The bank is reportedly due to be sold at a modest discount of about RUB20bn to its capital, the main reason being the breakdown of Russian-Turkish ties and stagnation of Russia's economy.

Credit Europe is the largest bank in Russia controlled by Turkish capital, operating in the country since 1994 when it was opened by Ozyegin's FIBA Holding.

The banking sector is not specifically affected by the sanctions Russia introduced against Turkey after the downing of the bomber incident, which Russian President Vladimir Putin called a "stab in the back".

Nevertheless, political risks are pressuring the bank and the corporate loan portfolio, which largely consists of Turkish clients operating in Russia.

Dmitry Vasiliev of Fitch Ratings told Kommersant that part of the corporate Turkish client portfolio was already transferred by Credit Europe to the mother bank in the Netherlands.

As the corporate loan portfolio is challenged, the bank's most attractive asset is its exclusive credit agreements with retail chains Auchan and Ikano Group, which operates Ikea furniture hypermarket chains, argues analyst Dmitry Zhizdyuk of Alfa Bank.

Other Turkish banks operating in Russia (Ishbank, Ziraat Bank, Yapi Credit Bank, Garanti Bank, and Prokommerz Bank) did not respond to inquiries by the Russian newspaper about a possible change to their ownership too.

Related Articles

Russian central bank governor Nabiullina to be nominated for further five-year term

The governor of the Central Bank of Russia (CBR), Elvira Nabiullina, will be nominated for another five-year term, President Vladimir Putin told the country’s top banker on March 22. The nomination ... more

Iran "hits impasse" in bid to set up Bank of England clearing accounts

Iran is failing to make headway with a request to the Bank of England (BoE) to set up special clearing accounts for its banks, Reuters reported on March 20. Sources said the BoE ... more

IMF delays new $1bn tranche to Ukraine due to Donbas blockade

Ukraine's main donor, the International Monetary Fund (IMF), has cancelled a board meeting scheduled for March 20 that was expected to see the release of a $1bn tranche to Ukraine, while demanding ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss