National Bank of Kuwait considers buying stake in Turkey’s Garanti GE’s 20.85 pct stake worth $4.3 bln

KUWAIT CITY, April 6, (RTRS): Kuwait’s largest lender, the National Bank of Kuwait (NBK) said on Tuesday it was considering buying a stake in Garanti Bank as Turkey was one of the emerging world’s most attractive banking sectors.
“NBK wants to expand in Turkey, a country that has a lot of potential,” said NBK’s Chief Executive, Ibrahim Dabdoub, in an e-mailed statement. “We need to have a stronger presence there,” he said. “One of the options is a share in Garanti Bank.”
General Electric said in February it would sell its 20.85 percent stake in the Turkish lender, currently valued at $4.3 billion.
NBK is the first bank to come forward publically and declare its interest. There has also been speculation that private equity funds might be eyeing part of the stake.
Sberbank, Russia’s biggest lender, said on Tuesday it had decided against bidding for the stake. A source told Reuters last month it was also considering a bid.
“We have not bid (for the stake) as we are interested in a controlling stake or in purchasing a minor one with the option to increase it further,” Sberbank’s Chief Executive German Gref told reporters on Tuesday.
Turkish newspaper Sabah reported on Monday four parties were interested, including National Bank of Kuwait, sovereign wealth fund Qatar Investment Authority, Spain’s Banco De Sabadell and Volkswagen Financial Services.
Banco De Sabadell said there was no deal underway with any Turkish bank, and Volkswagen Financial said on Tuesday it was not interested in Garanti.
Garanti shares, typically Turkey’s most actively traded stock, had closed morning trading up 0.67 percent at 7.50 lira, but traded flat by 1300 GMT.
Some potential buyers may have been deterred by the cost of the Garanti stake, as the Turkish stock index hit an all-time high on Monday, and others may have been put off by the fact that the size of the stake would not bring control of Garanti.
Sources told Reuters at the end of March that GE had received non-binding bids but due diligence had not yet started.
The bank is just under 50 percent publicly traded, while Turkish conglomerate Dogus Group owns 30.5 percent and has first refusal on the stake. It has declined to clarify its intentions.
Last month, NBK shareholders approved a 10 percent capital increase through a rights issue to fund expansion. NBK owns a 40 percent stake in Turkish Bank, and its investment arm NBK Capital has an office in Turkey.
“NBK has already succeeded in a number of operations in the Turkish market including real estate and private equity... it is a stage in the process of NBK growth. It wants to guarantee it continues to grow in the next 10 years,” said independent Kuwaiti economic analyst Ali Al-Nimesh.

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