Saluting a new troop of bankers
Posted by meb at April 23rd, 2008
BANK BUYER Share (%) PAID
Oyakbank ING 100 $ 2.673 bln.
Türkiye Finans NCB 60 $ 1.080 bln.
Akbank Citibank 20 $ 3.1 bln.
MNG Hariri 91 $161 mln.
Sekerbank TuranAlem 34 $ 350 mln.
Denizbank Dexia 75 $ 2.440 bln.
Tekfenbank EFG 70 $ 182 mln.
Finansbank NBG 46 € 2.3 bln.
C Bank Hapoalim 57,5 $ 113 mln.
Yapi Kredi Koc Unicredit 57,4 € 1.2 bln.
Garanti GE 25,5 $ 1.556 bln.
Dısbank Fortis 89,3 € 880 mln.
TEB Paribas 42,1 $ 216.8 mln
Turkishbank NBK 40 $ 160 mln.
The sale of Oyakbank to Dutch banking giant ING Groep for $2.673 billion has unleashed a new “war” between Turkish banks, as the “military banking market,” worth YTL 3 billion ($2.3 billion) annually, has opened up to competition, a Turkish-language daily reported yesterday.
Oyakbank, an affiliate of the Turkish Armed Forces Assistance Fund (OYAK), had undertaken carrying out the financial needs of the military until last year’s sale. As Oyakbank signboards in branches are replaced with those of ING Bank, the vacuum might be filled by five banks, according to daily Vatan.
Vakıfbank, Garanti, Akbank, Yapı Kredi and İşbank have received permission to open branches and ATMs on military bases. These banks are now vying for a share of this new, giant market, which includes salary payments and all banking transactions of 140,000 officers and noncommissioned officers.
The figure may reach half a million, if retired soldiers are included, a banking executive told Vatan.
A significant contribution:
ING Groep bought Oyakbank from the army’s pension fund last year and the sale was approved by regulators in December. Transactions with the Turkish military equaled more than one-third of Oyak’s total business and between 1.5 to 2 percent of turnover in the Turkish banking industry as a whole, the newspaper said.
“At least one-third of all Oyakbank customers were soldiers,” an executive told Vatan, requesting anonymity. “Taking Oyakbank’s market share into account, [military customers] constitute 1.5 to 2 percent of Turkish banking. Thus, five banks are now in some sort of promotion race. These promotions vary according to the location of bases.”
Another banking executive told Vatan that in the past few months, Akbank won the tender to open branches and ATMs at the Gölcük Naval Command Headquarters. The same executive said the tenders for the Air Force Command were won by Akbank, while Vakıfbank won tenders for the General Staff, Land Forces Command Headquarters and the Defense Ministry. Meanwhile, Garanti won tenders in various locations, such as the Mediterranean Regional Command Headquarters and the Fourth Air Force Squadron Base.
Oyakbank had 89 branches on military bases, out of a total of 365 branches nationwide. Nearly one-third of Oyakbank’s 1.3 million customers are “military-based,” Vatan said.
ING responds:
Meanwhile, ING Groep said it does not expect to lose a “significant” amount of business as the Turkish army switches to other banks to handle payments to soldiers and military pensioners, Bloomberg reported.
Commenting on the claim that the bank might lose $2.3 billion in business, Oyakbank CEO Hakan Eminsoy said, “This is a totally exaggerated figure. We are not concerned even if we don’t get any new contracts.”
The army accounts for about 200,000 out of Oyakbank’s 1.3 million total customers, he said.
“In terms of contribution it isn’t that significant, only 2.5 percent of total deposits, and the cost of this operation is so high.”
The contract losses won’t have a “significant impact” on Oyakbank’s first-quarter results, Eminsoy said. One-third of the contracts still continue, he said.
“When we bought Oyak Bank we already calculated we would lose a large amount of contracts with military bases but overall it is not significant for ING and definitely not $2.3 billion,” a spokeswoman in Amsterdam told Reuters. She added that Oyak Bank had about 1.3 million clients, of whom about 200,000 are military personnel.
ING shares traded at 24.565 euros as of 3.43 p.m. in the Netherlands yesterday. The shares lost nearly 6 percent since the beginning of the year.
Active in banking, insurance and asset management, ING Groep operates in more than 50 countries, employing nearly 120,000 people. The bank aims to grow in Turkey, China, India, Romania and Russia over the next years.
source: Turkish Daily News
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