"NBK wants to expand in Turkey, a country that has a lot of potential," said NBK's chief executive, Ibrahim Dabdoub, in an e-mailed statement. "We need to have a stronger presence there," said Dabdoub. "One of the options is a share in Garanti Bank."

General Electric said in February it would sell its 20.85 percent stake in the Turkish lender, currently valued at $4.3 billion.

NBK is the first bank to come forward publicly and declare its interest, although a source told Reuters Russia's Sberbank was interested. There has also been speculation that private equity funds might be eyeing part of the stake.

Some potential buyers may have been deterred by the cost of the stake, as the Turkish stock index hit an all-time high on Monday, and the fact that the size of the stake up for sale would not bring control of Garanti.

Turkish newspaper Sabah reported on Monday four parties were interested, including National Bank of Kuwait, sovereign wealth fund Qatar Investment Authority, Spain's Banco De Sabadell and Volkswagen Financial Services.

Banco De Sabadell said there was no deal underway with any Turkish bank, and Volkswagen Financial said on Tuesday it was not interested in Garanti.

Garanti shares, typically Turkey's most actively traded stock, closed morning trading up 0.67 percent at 7.50 lira, outperforming the Istanbul index which fell 0.12 percent. Prior to the comments by NBK they had traded down 0.67 percent.

Sources told Reuters at the end of March that GE had received non-binding bids for its stake though due diligence had not yet started.

The bank is just under 50 percent publicly traded, while Turkish conglomerate Dogus Group owns 30.5 percent and has first refusal on the stake.