“Now is the time to enter the country. We have decided to invest in Turkey, which will become the world’s 12th biggest economy by 2017,” Michael Tilment, chairman of the ING Group, told CNNTürk television news.
Mr Tilment said ING would increase the number of Oyak Bank’s branches from 362 and 450 and expand its market share from 3% to 5%.
Founded in 1984 as the Istanbul branch of the Bank of Boston, the bank was fully acquired in 1994 by Oyak, a supplementary pension fund operated by the Turkish Armed Forces for its members and a major industrial group. Oyak Bank, Turkey’s 11th biggest bank, employs 5581 people and had assets of €5.3bn at the end of 2006. It controls about 2.5% of the nation’s bank deposits.
Oyak turned down a bid for the bank from France’s Crédit Agricole Group after the French National Assembly decided in October 2006 to make it illegal to deny the 1915 Armenian genocide. It also found an offer from the UK’s Standard Chartered insufficient.
Oyak plans to use the funds generated from the sale for investments in steel, energy and motor vehicles. The group has been running into severe financial pressures since acquiring a controlling stake in the country’s biggest steel manufacturer, Erdemir, for $2.77bn in February 2006 through the nation’s privatisation programme.
Nationalists expressed disappointment over the planned sale, and retired army officers urged members of the armed forces to withdraw their savings from Oyak when the transaction is completed and to deposit their funds with a Turkish-owned bank, such as Türkiye Is Bankasi.
“An era has come to a close: The [Turkish] soldier’s bank has gone to foreigners,” the nationalist newspaper Milliyet said in a headline.
“I view the sale of this bank as a problem involving the national sovereignty of the Turkish Republic,” retired army general Riza Küçükoglu, president of the Turkish Retired Officers’ Association, said in an interview with Milliyet. “After this sale, I expect members of Oyak to carry out their banking transactions via national companies.”
LSE/Borsa Italiana talks
The London Stock Exchange has been reported to be in advanced takeover talks with the Borsa Italiana. The deal is estimated to value the Italian stock exchange at about €1.5bn – above the valuation placed by bankers last year when the Borsa considered an initial public offering.
German regional state-backed lender WestLB has announced plans to play an active role in the consolidation of the landesbanken, the country’s regional lenders. The announcement followed rumours of a possible merger between Germany’s largest landesbank, LBBW, and WestLB.
RBS Moscow connection
Royal Bank of Scotland plans to open an investment bank in Russia with Moscow-based bank Renaissance Capital, according to Reuters. RBS and Renaissance would each own 50% of the new bank, which would start operations as early as 2008.
The Scottish bank would gain a marketing platform for its investment banking services in Russia and Renaissance Capital would widen its service offering to its clients.
Investment banks Raiffeisen Investment and Lazard have announced a co-operation agreement to provide mergers and acquisition advice in Russia and central and eastern Europe. The co-operation aims to leverage Raiffeisen’s strong presence in the region with Lazard’s premier advisory expertise.
The Cypriot government has invited expressions of interest to dispose of its major stake in the Cyprus Development Bank. Cyprus owns more than 88% of the lender while the European Investment Bank owns the remainder. Bidders will be judged also on their ability to close the transaction by the end of the year.
Standard Chartered Bank has announced the opening of its private banking global headquarters in Singapore. The bank will focus on providing specialised products and services for high net worth individuals with between $1m and $50m in assets.
Standard Chartered has also announced it will launch its private bank in London, offering service to UK and European residents with strong links to the bank’s markets in Asia. The London private bank will also provide services to clients based in Asia, Africa and the Middle East who have close connections with the UK and want a London-based service.
Standard Chartered’s private bank plans to employ up to 450 private bankers in the next few years and will operate in Hong Kong, Shanghai, Beijing, Seoul, Mumbai, New Delhi, Dubai and Jersey.
Westpac’s China gambit
Australian lender Westpac Banking Corporation has announced it will open a branch in Shanghai to service Australian and Chinese business customers. The bank said that an increasing number of its Australian and New Zealand corporate and business banking customers have business interests in China and need trade and corporate finance.
The world’s third largest bank by Tier 1 capital, HSBC, has announced plans to open two or three private banking offices in China this year and start offering renmimbi deposits. The bank said that it also plans to expand further its private banking services in India and the Middle East.
HSBC’s private banking division still contributes a modest 5.5% of the group’s profits, but has seen returns jump from $563m in 2003 to $1.21bn in 2006.
HSBC has announced it will start linking the pay of senior managers to customer satisfaction levels. Data about customer satisfaction will be used when determining bonuses for the bank’s top executives, borrowing techniques developed in the hotel and airline industries to improve customer service levels.
Corrections
In the winning Pakistan Mobile Communications deal in the Pakistan section of May’s Deals of the Year listing, Jahangir Siddique & Co and KASB Securities should have been mentioned equally as joint lead advisers and arrangers of the $53m listed bond along with MCB Bank.
In the Technology Awards of the June issue, The Banker commended TradeWeb in the Front-office Innovation section. We said that TradeWeb was launched in 2006 while this was the year of launch for its European Credit platform, which grew from six dealers and 35 institutions to 12 dealers and 330 institutions in the first eight months. TradeWeb was launched in 1998 and counts on a total of 35 dealers and more than 2200 customers worldwide.
In its June online and print editions, The Banker erroneously characterised the partnership between Moody’s KMV and SunTrust Bank, and the solutions Moody’s KMV provided SunTrust Bank.
Moody’s KMV was formed in April 2002 with the acquisition of KMV by Moody’s Corporation and subsequent merger with its Moody’s Risk Management Services subsidiary. Moody’s KMV partnered with SunTrust Bank in 2006 to develop a model for assessing correlations in credit quality between small and mid-sized enterprises (SMEs) in the bank’s lending book.
We apologise for the errors.
