Back to press releases
  • Press release

BNP Paribas plans entry into Turkish banking market through strategic partnership with Türk Ekonomi Bankası A.Ş. (“TEB”)

BNP Paribas announces that it has agreed with the Çolakoğlu Group to explore a strategic partnership in the Turkish banking sector. The parties signed today a Memorandum of Understanding whereby BNP Paribas intends to acquire a 50% stake in TEB Mali Yatırımlar A.Ş., the Çolakoğlu group's holding company for financial services which has an 84.23% controlling stake in TEB, from the Çolakoğlu Group which will remain a 50% shareholder in TEB Mali Yatırımlar A.Ş.

TEB enjoys one of the highest ratings by the international agencies amongst the Turkish banks. It is the 10th largest private Turkish bank in terms of assets and a leading bank in trade finance and private banking. TEB is a mid-sized universal banking group, reputed for the quality and liquidity of its assets and characterized by prudence and conservative management. Through its subsidiaries, TEB offers a full range of financial products to its corporate, private banking and retail clients including trade finance, leasing, factoring, consumer finance, deposit products, cash and asset management, insurance, investment banking, advisory services and brokerage. TEB's network comprises 85 branches, two banks outside Turkey and employs 2,006 people.

BNP Paribas is interested in expanding its presence in the Turkish banking market due to its positive growth prospects. Turkey's GDP growth rate was 5.8% in 2003 and is expected to continue to grow at 4 to 5% in the next couple of years. Chronic high inflation which plagued the economy since the late 70's has been declining sharply and is expected to fall into single digits in 2005, allowing for lower interest rates and continued economic recovery. Turkey is the 18th largest economy in the world, with a population of 70 million, a GDP of USD 261 billion and a foreign trade volume of USD 130 billion. An entrepreneurial middle class is emerging, with some 9 million Turks having standards of living comparable to the Western European average. The banking market penetration ratios remain low and have significant upside potential (loans/GDP of 23% vs. 167% average EU). TEB provides an excellent opportunity to access a sizeable and interesting market.

For the year ended 31 December 2003, TEB had revenues of USD 187 million, net income (including minorities) of USD 39 million, total assets of USD 3.0 billion, loans of USD 1.2 billion, deposits of USD 2.2 billion and shareholders' funds of USD 233 million. The RoE for 2003 was 17.6% and the total capital adequacy ratio 15.2%.

The completion of the transaction is subject to due diligence, negotiation of legal documentation and regulatory approvals. It is expected that the final terms of the transaction should be announced towards the end of the third quarter of 2004. The discussions between the parties will be exclusive during this period.

This partnership would reflect the desire of both BNP Paribas and the Çolakoğlu Group to provide TEB with the means to continue its development in the Turkish corporate, private and retail banking markets. This acquisition would allow BNP Paribas to substantially enhance its presence in one of the largest and fastest growing banking markets of the Mediterranean Basin.