National Bank of Kuwait expands in Turkey with the conclusion of 40% acquisition of Turkish Bank

The conference was attended by Ibrahim S. Dabdoub, CEO of NBK Group, Hamad Al Sager, Board member of NBK, Tanju Ozyol, Chairman of Turkish Bank Group and Hakan Bortecene, CEO of Turkish Bank Group.

Ibrahim Dabdoub, Chief Executive Officer of NBK Group and new Vice Chairman of Turkish Bank, said,

“This is a significant milestone in NBK’s regional expansion strategy and also reflects NBK’s increasing interest in the growing Turkish banking sector. NBK believes that the Turkish economy will continue its strong growth over the long term on the back of continued economic reforms, political stability and favorable demographic trends; this will have a positive effect on the banking sector in the coming years.”

Turkey is a huge regional country with great growth and investment opportunities in all sectors and I am glad to see Turkey accelerating the pace of its privatization program. We, in the GCC, should seize this opportunity. It is also the time for Turkey to be closer to the Gulf, added Dabdoub.

Turkey sold $40bn worth of assets to international investors from 2004 to 2007, five times the amount from 1985 to 2002. Foreign direct investment (FDI) in Turkey has increased significantly since 2006, with international investors pouring $42bn into the country over the past two years alone. FDI in Turkey averaged less than $1bn a year from 1980 to 2003. Gulf investors are already an important source of FDI, accounting for at least 25% of the total.

Among the recent deals involving NBK in Turkey, Saudi Arabian food company Savola completed its $71m acquisition of edible oil firm Yudum Foods, NCB of Saudi Arabia acquisition of Turkie Finans Bank and Kuwait Investment Authority (KIA) buying a 50% stake in Cevahir Shopping Centre for $750 million in March 2007, in addition to the Turkish Bank deal. We believe NBK can play a major role in the future to enhance the mutual business and economic relationships and investment opportunities between Kuwait and Turkey. Several GCC investment companies have also set up operations in Turkey, said Dabdoub.

Commenting on NBK’s strategy for regional expansion Dabdoub stated, “Recently we shifted plans to expand our presence in the region up a gear, and recently, this year we concluded several significant deals. The acquisition of Egypt’s Al Watany Bank, the acquisition of a 40% stake in Turkish Bank, and the increase of our ownership stake in the International Bank of Qatar to 30%, signal our determined commitment to regional expansion as a strategy to sustain the bank’s growth in the future.”

Tanju Ozyol, Chairman of Turkish Bank Group, said that “this acquisition brings significant added value to Turkish Bank particularly given NBK’s experience in regional and international markets. Turkish Bank will work closely with NBK in growing its franchise in retail banking across Turkey as well as enhancing its market share through an expanded branch network.”

Today, NBK enjoys the largest presence in Kuwait with 67 branches, as well as a growing international representation in many of the world financial centers such as London, Paris, New York, and Singapore, as well as in China (Shanghai) and Vietnam (Ho Chi Minh City). The new acquisitions in Egypt and Turkey follow on the heels of NBK’s recent entry into Qatar, Saudi Arabia, Jordan, and Iraq. Together with an established presence in Bahrain and Lebanon, these new markets position NBK as a leading regional player. The Bank also enjoys added coverage in the Kuwaiti, Turkish, and Dubai markets through its investment arm, NBK Capital.

During 2007, NBK’s long-term credit rating was upgraded by Moody’s to Aa2 from Aa3, and by S&P rating agency to A+ from A, a reflection of the Bank’s strong financial position and long term positive outlook. This further consolidated the strong reputation NBK has enjoyed over the years, having been consistently awarded the highest credit rating of all banks in the region and emerging markets from Moody's, Standard & Poor's, and Fitch Ratings.

The Bank’s rating is supported by its high capitalization, prudent lending policies and its systematic approach to risk management, in addition to the recognized excellence of its very stable management. NBK's total assets reached $42.3bn (KD11.5bn) at the end of 2007, while its shareholders' equity stood at $5.5bn (KD1.5bn).

Established in 1982, Turkish Bank enjoys a unique position in the Turkish banking sector and has been rated as the 12th fastest growing bank in Europe by “The Banker” magazine. With its 20 branch network, its long-term client relationships, and exceptional service offerings, NBK believes that Turkish Bank will provide a solid platform for future expansion.