Spain’s BBVA buys additional 9.95% in Turkish lender Garanti for €859mn

By bne IntelliNews February 22, 2017

Spain’s second biggest lender BBVA announced on February 21 that it has agreed to acquire an additional 9.95% of Turkish lender Garanti Bankasi from Dogus Group for TRY 3.32bn (€859mn), raising its stake to 49.85%.

“BBVA will pay TRY7.95 for each share. Completion of the transaction is conditional on the corporate approvals of the sellers and certain other regulatory actions,” Garanti said in a stock exchange filing.

Once the deal is complete, Dogus will own 0.05% of Garanti.

BBVA first invested in the Turkish bank in 2011 with the acquisition of a 25% stake, purchasing Garanti shares from Dogus and General Electric. In 2015, the Spanish lender increased its stake to 39.9%.

“The transaction is expected to be closed during the first half of the year,” BBVA said.

Garanti is Turkey’s second largest bank with assets of $88.8bn given as of end-2016. It has more than 14mn customers, 20,000 employees, 1,100 branches and 5,100 ATMs.

Garanti’s net income increased by 43% to TRY5.11bn last year.

Despite political uncertainties, and the slowing economy, Turkey’s banking industry remained profitable last year. Turkish banks’ combined net income increased to TRY37.5bn in 2016 from TRY26.1bn in 2015.

But, the latest figures from the Turkish Banks’ Association (TBB) suggest that the operating environment has become more challenging for local lenders. Turkish banks closed branches and reduced their workforce last year.

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