Qatar bank to buy majority stake in Alternatifbank

Commercial Bank of Qatar (CBQ) has agreed to buy a 70.8 per cent stake in Turkish lender Alternatifbank, underscoring Gulf Arab lenders' appetite to expand into Europe's fastest growing economy. CBQ, the Gulf state's thirdlargest bank by market value, began talks in December with Alternatif's parent Anadolu Holding for the purchase, seeking to extend its footprint outside the Gulf for the first time.

The deal is valued at $460 million based on Alternatif's book value of $328 million at the end of December. The final price will be based on two times the Turkish lender's book value as at June 30, 2013, CBQ said on Monday.

Gulf Arab banks are keen to build a presence in Turkey, one of the world's fastest-growing emerging markets, to diversify their regional presence amid growing competition at home.

With the Turkish regulator following a stringent policy on handing out banking licences, acquisitions have been the preferred route for most interested parties.

Lebanon's Audi Bank became the first lender to obtain a Turkish banking license in more than a decade when it received regulatory approval last year. Qatar National Bank, the Gulf state's largest lender, is also interested in expanding into Turkey through acquisitions, though it has no firm targets, its chief financial officer said in January. It bid for Denizbank last year but lost out to Russia's Sberbank. Denizbank was sold for around 1.3 times book value, lower than the multiple CBQ is paying for Alternatif, though that partly reflected the pressure on Denizbank's owner, Dexia, to sell the business. In April last year, Greek bank EFG Eurobank sold its Turkish arm to Kuwaiti group Burgan Bank in a $355 million deal.

"Qatar and Turkey continue to strengthen their relationship which will benefit the new partnership between Commercialbank and ABank enabling both banks to continue to grow and thrive," said CBQ Chairman Abdullah Bin Khalifa Al Attiyah.