Moscow,:Russia’s state-owned Sberbank said Tuesday it was selling its Turkish subsidiary Denizbank to Emirates NBD for roughly 2.7 billion euros ($3.2 billion) to focus on its own brand.
Sberbank bought Turkey’s fifth-largest lender in 2012 from the failing French-Belgian bank Dexia as part of efforts to expand internationally, but US sanctions imposed after Russia’s intervention in Ukraine have crimped that strategy.
The Russian bank said the financial impact of the deal will depend on fluctuations in the exchange rate of the Turkish lira, which has been weakening in recent months, until the closing of the transaction.
Sberbank paid Dexia 6.5 billion Turkish lira for Denizbank, which was worth approximately 2.8 billion euros or $3.5 billion at the time. While Sberbank will receive 14.6 billion lira for Denizbank, that is currently less than the purchase price in dollars.
Sberbank’s chief executive German Gref said “the decision to sell Denizbank is prompted by a change in Sberbank Group’s international strategy and will allow us to focus further on development of the ecosystem of Sberbank.” Meanwhile, Emirates NBD’s vice chairman and managing director Hesham Abdulla Al Qassim said the purchase will help it “establish itself as a leading bank in the …
region and achieve meaningful diversification of its operations, both in new countries and in a broad range of business segments.” Denizbank has approximately 11.8 million clients and a network of 708 branches in Turkey.
