DUBAI
Emirates NBD said on Tuesday it is in initial discussions with Russia’s state-owned Sberbank to buy its wholly-owned subsidiary Denizbank in Turkey even as the Dubai-based biggest lender routinely evaluates potential opportunities in different markets.
Sberbank, which is 50 per cent owned by the Russian government, had bought 99.85 per cent stake in Denizbank for $3.6 billion in September 2012, before the US and European sanctions kicked in 2014.
“Discussions are at a very preliminary stage and there is no certainty that any transaction will be entered into. A further announcement will only be made if there is a material development,” the bank said in an emailed statement on Tuesday.
Sberbank also confirmed the talks in a separate statement posted on its website. Shares of Emirates NBD rose nearly 6 per cent to Dh8.94 in a weak Dubai market, while shares of Denizbank also jumped 19.96 per cent to 5.77 Turkish Lira. Sberbank shares recovered after opening in negative zone to trade 1 per cent higher at 254.81 roubles.
Record profit
Emirates NBD saw the strongest ever results in 2017 after the bank reported a record profit of Dh8.35 billion in 2017 on income of Dh15.45 billion.
“We are confident that our prudent business model shall continue to deliver a solid performance and deal with the opportunities and challenges that will present themselves,” said Hesham Abdulla Al Qassim, Vice-Chairman and Managing Director, Emirates NBD in a statement on January 16.
Denizbank made a net profit of 1.41 billion Turkish liras in the nine months to September 2017 and registered an interest income of 9.4 billion Turkish liras. The bank had a total assets of 151 billion Turkish liras till the end of September. It had 740 branches and 5,195 ATMs, employing 14,773 people till the end of third quarter.
Aspiration
According to analysts, if the deal is successful it would enhance the aspiration of Emirates NBD as the leading bank in the Mena (Middle East and North Africa) region. “The banks in the region want to be in Saudi Arabia, and then in Egypt, which is the most populous country in the region. The the next target is Turkey. The thing about Turkey is that it’s a very attractive market on paper but could be challenging in reality,” Sanyalaksna Manibhandu, head of research, First Abu Dhabi Bank Securities, told Gulf News.
Emirates NBD previously bought BNP Paribas’ unit in Egypt, and also opened a branch in Mumbai last year, its fifth international branch outside the UAE.
“The bank will continue to implement its successful strategy built around five pillars which include delivering excellent customer experience with a digital focus, building a high performance organisation, driving core businesses, running an efficient organisation and driving geographic expansion,” the bank said in a statement earlier in the month.
Bank mandates banks for dollar bond issue
DUBAI: Emirates NBD, Dubai’s largest lender, has mandated banks to arrange a series of fixed income investor meetings in Singapore ahead of a potential bond issue denominated in Singapore dollars, a document by one of the banks leading the deal showed on Tuesday. DBS Bank, Emirates NBD Capital, HSBC and Standard Chartered Bank have been hired as joint lead managers and bookrunners for the potential deal.
The meetings will take place on February 1 and a Regulation S offering of fixed rate notes with short to intermediate maturity will follow, subject to market conditions.
-Reuters
