By Pratap John/Chief Business Reporter

Commercialbank is hopeful of completing the acquisition of a majority stake in Turkey’s Alternatifbank (ABank) by June or July, said Group CEO Andy Stevens. 

Commercialbank and ABank have already exchanged documents and signed a binding share purchase agreement and shareholder agreement.

Recently, Commercialbank said it had agreed to acquire a 70.84% shareholding in Alternatifbank from Anadolu Endustri Holding for two times the book value as of June 2013.

“What we have to do now is to complete the process by submitting all the documentary applications to the regulators in Ankara,”  Stevens said in an  interview with Gulf Times yesterday.

“And subject to all of the regulatory approvals, this deal will go through. The negotiations have finished. There are no further terms or conditions to be agreed.  They have all been agreed upon and incorporated into the share purchase agreement. The shareholder agreement that dictates how the parties will operate has also been agreed.”

Asked why Commercialbank had chosen Turkey and ABank, Stevens said: “It is part of the Commercialbank strategy to go overseas to diversify its balance sheet, risks and revenue opportunities. But our principal market will always be Qatar.

“We recognised the potential of the Turkish market way back in 2009 when we had gone to Istanbul for the IMF/World Bank Group meetings. At that time we got engaged with potential Turkish parties. We have done due diligence and studied the Turkish market quite well. Its geography, demographics, and obviously, economics and the macro story are all highly impressive.”

Turkey is now the 15th largest economy in the world and many predict that in the next 10 to 20 years, it will be within the top 10. Turkey’s GDP per capita had tripled in the last decade.

“Turkey is witnessing massive urban expansion and carrying out infrastructure developments on a big scale. The  government is really pushing the country’s development forward. The country’s private sector is keeping pace with that.

“Also, Turkey has a population in excess of 70mn, 50% of whom are below 35. The country has about 40mn graduates. Turkey has a strong pool of educated, multi-skilled workforce.”

Turkey also provided “multilateral opportunities”, Stevens pointed out.

“Turkey has a ‘fascinating’ trading block around it and has always traded strongly with its neighbouring countries. Turkey has strong trading links with the likes of Russia, Ukraine, Moldova, Georgia, Uzbekistan, Azerbaijan…. And of course, now with Iraq and Kurdistan.

“It is interesting to note that before the global financial crisis, Europe accounted for 30% of Turkish exports. Following the financial crisis, the European crisis in particular, this got reduced to 24%.”

At the same time, Turkey’s share of trade with the GCC and the Middle East has risen by that amount.

“So, Turkey has the ability to redirect its business. It is a really exciting place to be in…Turkey provides us a great opportunity,” Stevens said.

He, however, clarified that Commercialbank did not go to Istanbul to be near Europe.

“Europe is not on our radar screen…but Turkey is.”

Stevens said Commercialbank had bought into ABank for a number of reasons.

“First, we bought into a huge growth story in Turkey. We want to be part of that Turkish growth story. And part of that story is the increasingly active Turkish links with Qatar and the rest of the GCC. The trade and investment ties that bind Turkey with Qatar and the GCC are strengthening all the time. So it is only logical that we should be part of that.

“And if on the top of that we can leverage on the macroeconomic growth story in Turkey…that is also our intention.”

Second, he said ABank was “successful” in its own right. “It is highly profitable, a very well-run bank… one that is very well capitalised. ABank has been led superbly by one of the most prominent commercial and industrial groups in Turkey (Anadolu). Theirs is a very strong name. So we just wanted to build on that.”