Emirates NBD reaches new agreement to buy Turkey’s Denizbank for $2.77bn

Emirates NBD is Dubai’s largest lender. (File/Shutterstock)
Updated 03 April 2019
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Emirates NBD reaches new agreement to buy Turkey’s Denizbank for $2.77bn

  • The current offer is lower than the $3.2 billion agreement reached last year
  • The transaction is expected to be completed by the end of the second quarter, subject to regulatory approval

DUBAI: Dubai’s largest lender Emirates NBD will buy Turkey’s Denizbank from Russia’s state-owned Sberbank for less in dollar terms than previously agreed following the devaluation of the Turkish lira.

Emirates NBD will buy Turkey’s fifth largest private bank for $2.8 billion (15.48 billion lira), the Dubai bank said on Wednesday, compared to the 14.6 billion lira announced in May, after reaching a new agreement with Sberbank.

Although the lira value is higher, the dollar value in May when the deal was announced was put at the equivalent of $3.2 billion, or about $400 million more that the new price.

The lira has tumbled over concerns about the central bank’s independence and Ankara’s worsening ties with Washington.

Dubai-based Arqaam Capital said the new deal represents a 16 percent discount from the original acquisition price due to the lira’s depreciation

Russia’s biggest bank by assets bought Denizbank in 2012 for about $3.5 billion when it wanted to establish a presence abroad. Selling Denizbank, the biggest asset held by Sberbank outside Russia, is part of a shift back to the domestic market.

Denizbank’s equity amounted to 15.51 billion lira as of December 31, Emirates NBD said in a bourse statement.

The deal will help Emirates NBD diversify its business and establish itself as a leading bank in the region, the bank’s vice chairman Hesham Abdulla Al-Qassim said in May.

The deal is expected to close by the end of the second quarter, subject to regulatory approval, Emirates NBD said.


Yemen central bank is ready to supply banks with foreign currency

Updated 9 min 26 sec ago
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Yemen central bank is ready to supply banks with foreign currency

  • The central bank was divided to two branches after the war started
  • The central bank almost doubled its rate last year to stabilize the economy

DUBAI: Yemen’s central bank said it is ready to supply commercial and Islamic banks with foreign currency to finance imports of goods into the country, which has been pushed to the brink of famine by a four-year war, a Yemeni news agency reported.
The central bank has split into two rival head offices, reflecting the war between the Saudi-backed government and the Iran-aligned Houthi movement, creating hold-ups and payment problems that have exacerbated an urgent humanitarian crisis.
The branch in the southern port of Aden, the seat of the internationally recognized government, issued a circular saying it was ready to sell banks foreign currency at a rate of 506 rials to the US dollar or at market rates, “whichever is lower,” state news agency Saba reported late on Monday.
It cited the statement as saying this would cover letters of credit and financing guarantees for imports of goods not covered by a $2 billion grant from Saudi Arabia to help finance imports of basic goods and petroleum products.
The United Nations says about 80 percent of the 30 million population needs some form of humanitarian assistance and two-thirds of all districts in Yemen are in a “pre-famine” state.
The rival central bank headquartered in Sanaa, the capital now held by the Houthis who control most urban centers in Yemen, did not receive any funds from the Saudi loan. An official in the Sanaa branch said last year that traders must get letters of credit in Aden.
The conflict has devastated the economy of the poorest Arabian Peninsula nation. It has cut supply routes, reduced imports and caused severe inflation. The central bank nearly doubled its interest rate late last year to stabilize the currency.