Abu Dhabi, UAEFriday 18 October 2019

Emirates NBD receives regulatory nods for its takeover of Turkey’s Denizbank

Banking regulators in the UAE, Turkey, Russia and Austria approved the 99.85 per cent purchase

Emirates NBD is getting closer to buying controlling stake in Turkey’s Denizbank. Reuters
Emirates NBD is getting closer to buying controlling stake in Turkey’s Denizbank. Reuters

Emirates NBD, the biggest lender by assets in Dubai, received regulatory approvals from four countries for its $2.7 billion (Dh9.91bn) takeover of Turkey’s Denizbank, bringing it a step closer to completing the transaction

The bank said it received nods from the UAE Central Bank, the Banking Regulations and Supervision Agency in Turkey, the Financial Market Authority in Austria and the Central Bank of Russia to buy the 99.85 per cent stake in Denizbank from Russia’s Sberbank.

“All required approvals from banking regulators have been received,” ENBD said in a bourse filing to the Dubai Financial Market, where its shares trade. “A few remaining regulatory approvals are currently being sought, following which the parties will be in a position to complete the transaction.”

Emirates NBD in April agreed to pay 15.48 billion Turkish lira (Dh9.81bn) to Sberbank for its unit, in a revised deal. The first share purchase agreement between Emirates NBD and Sberbank was announced on in October last year, in which both lenders agreed on a sale price of 14.6bn Turkish lira, which was worth about $3.2bn at the time.

The deal could now save the Dubai-headquartered bank about $700 million as the lira continues to depreciate, according to Bloomberg.

The news of regulatory approvals sent Emirates NBD’s stock more than 5.5 per cent higher, making it the biggest gainer on Dubai Financial Market General Index during early trading on Sunday.

Turkey, Nato’s second most populous country, slipped into recession for the first time in a decade in March this year. It was a blow for President Recep Tayyip Erdogan, who lost major cities in bellwether municipal elections in April. His party lost Istanbul in a ballot re-run earlier this month, a sign of voters’ discontent with Mr Erdogan’s economic policies.

The equity capital Denizbank, the fifth largest private bank in Turkey, amounted to 15.51bn lira at the end of the last year, Emirates NBD said in an April statement.

Egyptian investment bank EFG Hermes on Sunday said the approval from the four regulatory authorities is “an important milestone and brings ENBD a step closer to completing its purchase of Denizbank”.

The Turkish deal is the second major acquisition for Emirates NBD since buying BNP Paribas’s Egyptian unit in 2013 for $500m.

The transaction is expected to be “accretive to shareholders in the first year," Shayne Nelson, group chief executive of Emirates NBD, said in an October 2018 statement.

Emirates NBD, which has operations in Egypt, Saudi Arabia, India, Singapore, the UK and representative offices in China and Indonesia, is expanding its footprint to boost revenue amid limited opportunities for growth in the over-banked UAE market, where more than 50 lenders compete for business.

Updated: June 30, 2019 01:00 PM

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