700 million dollars in nuclear deposits

Russians entrance in Turkish banking sector via acquisition of Denizbank upsets Garanti Bank managers. Should the sale is approved by authorities, Russia will move its 700 million dollars for Akkuyu nuclear power plant from Garanti to Denizbank. Considering the total amount for the construction of the plant, which is 1.7 billion dollars, this bank acquisition becomes more critical.

Russia's largest Bank Sberbank has agreed with Dexia on the sale of Denizbank. Sberbank CEO Herman Greff said: “We hope to finalize the deal at the end of this year. We expect to get all necessary approvals by that time.” He mentioned the ball was on Turkish banking authorities' court. Russian banker said they did not see any problems about the permission. “We already acknowledged our intention. We would not go for it if we had not receive green light from authorities,” he stated.

Now it is Banking Regulation and Supervision Agency's (BRSA) decision to make. Although its president has not been appointed yet, the agency will carry out routine procedures. It will ask for opinions of Chief Commander Office, National Intelligence Agency, Foreign and Internal Ministries. Depending on the responses agency board will make the final decision.

Nuclear funds war

According to Vatan daily's Ufuk Şanlı, entire Turkish banking industry is monitoring the developments in Denizbank sale closely, Garanti in particular. To better understand the reason one should look back to developments in April.

Energy Minister Taner Yıldız said the preliminary works for Akkuyu nuclear power plants, which is expected to cost 20 billion dollards, were on track. “700 million dollars were transferred to Turkey for Akkuyu power plant,” he said. Yıldız did not mention in which bank this money was deposited, however, in financial circles the rumors were focusing on a state-owned bank.

Nuclear fund was also discussed by Turkish and Russian bankers. Sberbank and Denizbank managers are keenly interested in nuclear power plant project carried out by Russian state-controlled company Atomstroyexport. According to Şanlı's sources initial capital of Akkuyu power plant was deposited in Garanti Bank.

Garanti managers also confirmed that the money was transferred to the bank in December and it will be transferred to another bank soon. A banking source said Russian aim to use this money as equity to receive further loans for power plant. “That's why it will be transferred to another bank inevitably,” he added.

Russians missed Garanti but not Denizbank

Sberbank's interest in Turkey is not new. Russians wanted to buy 20.85 percent stake in Garanti, which was put up for sale in 2010 by General Electric. But they could not agree on the price. Again they wanted to buy Adabank, which is controlled by Savings Deposit Insurance Fund but pulled out as the bank was too small.

During that period Greff said Turkish banks were extremely strong and they have sound technological infrastructure and interesting products. “That's why we are still interested in Turkey as a bank. We really want to buy one,” he noted. Two years after this interview Russians agreed to buy Denizbank. So, Sberbank missed Garanti but not Denizbank. ( Vatan, June 10, 2012)