The Banker
July 1, 2007
ING’s Oyak Buyout Stirs Ire Of Turkish Nationalists
The ING Group of the Netherlands announced in June that it was
acquiring Oyak Bank from the Turkish Armed Forces Pension Fund (Oyak)
for $2.67bn to capture a share of Turkey’s fast-growing consumer
banking business.
"Now is the time to enter the country. We have decided to invest in
Turkey, which will become the world’s 12th biggest economy by 2017,"
Michael Tilment, chairman of the ING Group, told CNNTurk television
news.
Mr Tilment said ING would increase the number of Oyak Bank’s branches
from 362 and 450 and expand its market share from 3% to 5%.
Founded in 1984 as the Istanbul branch of the Bank of Boston, the
bank was fully acquired in 1994 by Oyak, a supplementary pension fund
operated by the Turkish Armed Forces for its members and a major
industrial group. Oyak Bank, Turkey’s 11th biggest bank, employs 5581
people and had assets of 5.3bn at the end of 2006. It controls about
2.5% of the nation’s bank deposits.
Oyak turned down a bid for the bank from France’s Credit Agricole
Group after the French National Assembly decided in October 2006 to
make it illegal to deny the 1915 Armenian genocide. It also found an
offer from the UK’s Standard Chartered insufficient.
Oyak plans to use the funds generated from the sale for investments
in steel, energy and motor vehicles. The group has been running into
severe financial pressures since acquiring a controlling stake in the
country’s biggest steel manufacturer, Erdemir, for $2.77bn in
February 2006 through the nation’s privatisation programme.
Nationalists expressed disappointment over the planned sale, and
retired army officers urged members of the armed forces to withdraw
their savings from Oyak when the transaction is completed and to
deposit their funds with a Turkish-owned bank, such as Turkiye Is
Bankasi.
"An era has come to a close: The soldier’s bank has gone to
foreigners," the nationalist newspaper Milliyet said in a headline.
"I view the sale of this bank as a problem involving the national
sovereignty of the Turkish Republic," retired army general Riza
Kucukoglu, president of the Turkish Retired Officers’ Association,
said in an interview with Milliyet. "After this sale, I expect
members of Oyak to carry out their banking transactions via national
companies."