ING Bank Weighs Sale of Turkish Unit 

(Bloomberg) --

ING Groep NV, the biggest Dutch lender, has been considering a sale of its Turkish business, people with knowledge of the matter said.

ING has held preliminary talks with potential advisers about the possibility of divesting Istanbul-based ING Bank AS, according to the people, who asked not to be identified because the information is private. It also approached a local competitor late last year to gauge their interest in a deal, though it isn’t currently running a formal sale process, one of the people said.

No final decisions have been made, and ING could opt to keep the business, the people said. A representative for ING declined to comment.

ING has been weighing exiting from Turkey as President Recep Tayyip Erdogan’s administration exerts its control over the banking industry, pushing commercial lenders to extend more credit to aid economic growth, while forcing the companies to cut the number and size of fees. A potential deal would follow a move by Italy’s UniCredit SpA to cut its stake in Yapi ve Kredi Bankasi AS as part of its strategy to divest non-strategic assets.

HSBC Holdings Plc is also considering leaving the Turkish market, where it has been operating since the early 2000s, Reuters reported on Jan. 29, citing unidentified people familiar with the matter. The global banking giant had already announced plans to cut jobs in Middle East, North Africa and Turkey as the latest part of its cost-reduction program.

Read more: UniCredit to Sell 12% Stake in Yapi Kredi Amid Divestment Plan

The Dutch lender, which entered Turkey by acquiring Oyakbank AS for $2.7 billion in 2007, has had a mixed experience in the country. Profit at the unit, the 12th largest of the country’s 47 banks, rose 39% to 1.47 billion liras ($238 million) last year, while assets declined slightly to 57.1 billion liras. Non-performing loans rose to 4.3% on a total of 10.6 billion euros ($11.8 billion) in the fourth quarter, compared with 2.8% a year earlier. Turkish loans make up about 1.5% of ING’s total loan book.

In 2018, the bank sold a bad loan portfolio of 533 million liras to investors for a marginal price of 10 million liras.

In Amsterdam, ING is seeking to replace outgoing Chief Executive Officer Ralph Hamers. That succession race could include Pinar Abay, the former head of the Turkish unit who was promoted to oversee the parent company’s biggest businesses in December, according to a Citigroup Inc. analyst.

The Borsa Istanbul Banks Sector Index rose as much as 4.9%, the most since Jan. 9. That compares with a gain of as much as 3% in the stock exchange’s benchmark index.

©2020 Bloomberg L.P.

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