Spanish banking firm BBVA has increased its stake to 85.97% in its Turkish arm Garanti BBVA.
BBVA paid approximately €1.41bn for the deal, which is part of its efforts to bolster its presence in emerging markets to capitalise on greater growth opportunities.
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The acquisition of an additional 36.12% stake in the Turkish franchise will allow the Spanish bank to infuse more capital without launching an additional tender offer.
“Throughout the years Turkey has become a strategic market for BBVA. The potential of growth for the Turkish economy, which BBVA estimates at 3% annually; its demographics with more than 85 million people and an average age of 33 years; its commercial ties with Europe and its low banking penetration, with household debt ratio below 20% of Turkey’s GDP; they all make it an attractive market in the long term,” the lender said.
Last month, BBVA increased the offer price by 23%, assuming full subscription by all Garanti BBVA minority shareholders, the deal was valued at approximately €1.98bn.
Despite the updated price, the new bid was lower than what was initially announced in November 2021, because the Turkish currency has slumped over 28% since then.
Garanti BBVA is said to have around 20% market share among private banks in loans in local currency and deposits.
As of 31 March 2022, the Turkish bank had 21,680 employees, 5,606 ATMs and 1,003 branches.
