First Abu Dhabi Bank (FAB), the UAE’s largest lender, is actively exploring opportunities to expand its global presence, with Turkey’s banking sector being a key focus. According to a report by Bloomberg, FAB has shown interest in acquiring stakes in several Turkish banks, including Yapi Ve Kredi Bankasi, Turkey’s seventh-largest lender by assets. The potential acquisition, part of FAB’s strategy to seek growth opportunities overseas, would significantly bolster its international portfolio.
Yapi Kredi, valued at approximately $7.6 billion, is part of Koc Holding, Turkey’s largest business and industrial group. FAB’s move to consider acquiring Yapi Kredi aligns with the increased interest of UAE banks in Turkish assets following Turkish President Recep Tayyip Erdogan’s Gulf region visit in 2023. During this visit, the UAE committed over $50 billion to support Turkey, marking a significant shift in economic relations between the two countries.
Other UAE banks, like Dubai Islamic Bank, have also made strategic investments in Turkey, reflecting the growing economic ties between the Gulf and Turkey. Dubai Islamic Bank, for instance, acquired a 20% stake in Turkey’s TOM Group of Companies in September 2023.
The news of FAB’s potential acquisition sent Yapi Kredi Bank’s shares soaring by nearly 6%, highlighting investor confidence in the deal. However, both Koc Holding and FAB have yet to make formal comments or announcements regarding these developments.
Daniel Takieddine, CEO Mena at BDSwiss, views this potential acquisition as a strong indication of the UAE’s commitment to diversifying its economic engagements. He believes that FAB’s interest in the Turkish market is a strategic move that could bring transformative changes to the Turkish banking sector and reinforce the UAE’s status as a key international investment hub.
FAB’s exploration of opportunities in Turkey follows its past efforts to expand its global footprint. The bank, formed through a merger in 2017, previously considered acquiring a majority stake in Egypt’s largest investment bank, EFG Hermes, and successfully completed a merger with Bank Audi Egypt in June 2022.
This move by FAB signifies a notable trend of Gulf-based banks expanding into international markets, especially in the Middle East and North Africa region. As Gulf banks continue to diversify their operations globally, the dynamics of the regional banking sector are poised for significant transformation.
