Gulf investment giants eyes Halkbank

Abu Dhabi Investment Authority and Mubadala, sovereign funds of United Arab Emirates, are assessing investment options in Halkbank. Abu Dhabi Investment reportedly pulled out letting Mubadala to pay 10 billion dollars for block sale of Halkbank.

According to Ufuk Şanlı of Vatan daily, sovereign wealth funds of Abu Dhabi Investment Authority and Mubadala is assessing opportunities to buy state-controlled Halkbank. After brief talks Abu Dhabi Investment Authority, which has 627 billion dollars under management, retreat from the race in favour of its ally Mubadala.

Mubadala's top managers have visited Ankara and Istanbul many times in the last six months. Banking sources say Arab fund, which has 50 billion dollars in total assets, could pay as much as 10 billion dollars for Halkbank. Twenty five percent of Halkbank's shares are listed on Istanbul Stock Exchange and the finance giant's market value is at 8,5 billion dollars.

Foreign interest in Turkish banks, which amaze global banks with their strong performance despite the global economic crisis, continues. Qatari NBQ and Russian Sberbank is interested in Denizbank, which Dexia Group has put up for sale, while other gulf investors also eyed another Turkish bank. Banking sources said Abu Dhabi sovereign fund's Mubadala is in talks for Halkbank in Ankara and Istanbul. Gulf investment fund was searching investments opportunities in finance sector for a long time. “Halkbank's 75 percent is under control of Privatization Administration. Arab investors are very keen on a block sale. Last call belongs to Ankara in this matter,” the sources added.

From bankruptcy to top rank

Halkbank is not on ruling Ak Party's privatization agenda. However, after Privatization Administration's launching another tender for consultancy spotlights turn on the public giant again.

During the deep economic crisis in 2001 Halkbank posted 12 billion liras total loss, but recovered quickly due to good governance and improvement in the economy. After 2003 bank started a comprehensive reform and restructuring plan and this change was also reflected in balance sheets in a short time period.

Then General Manager Hüseyin Aydin and his managing team have increased bank's total assets to 40.2 billion liras at the end of 2007 from 19.3 billion liras in 2003. The bank's profit rose to 1.1 billion liras from 486 million liras in the same period. Fast growth rates attracted foreign investors. Total bid for 25 percent of Halkbank in public offering reached to 12.9 billion dollars. It raised 1.8 billion dollars in the IPO. Halkbank ranked sixth in Turkish banking sector with 91.1 billion liras total assets by the end of 2011.

'Arab Spring' in Turkish banks

Gulf investors' interest in Turkish banking industry increased significantly over the last years. Kuwait's second largest bank National Bank of Kuwait (NBK) acquired 40 percent of Turkish Bank in 2007. Soon after, Ülker and Boydak Groups sold their majority stake in Turkish Finance Participation Bank for 1.08 billion dollars to National Commercial Bank (NBC) of Saudi Arabia. Lebanon's largest bank Bank Audi received the first banking license in Turkey after 14 years. Latest wave of Arab Spring arrived by Kuwaiti Burgan Bank. Kuwaiti company bought Eurobank Tekfen last month and aims to grow in commercial banking. (Vatan, May 25 2012)