Exclusive: ING on course to win auction for HSBC's Turkish bank - sources

Thu Jul 2, 2015 6:29pm EDT
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By Asli Kandemir, Nevzat Devranoglu and Steve Slater

ISTANBUL/LONDON (Reuters) - Dutch lender ING Group ING.AS is set to win the auction to buy HSBC's (HSBA.L: Quote) Turkish business, people familiar with the matter said on Thursday.

Four people familiar with the situation said HSBC had narrowed the field to one suitor, with two of the sources identifying ING as the preferred buyer, though a deal has yet to be finalised.

ING, which already has a presence in Turkey, was one of three banks to submit a non-binding bid in May, sources previously told Reuters. The other two were Bahrain's Arab Banking Corp (ABC) ABCB.BH and France's BNP Paribas (BNPP.PA: Quote).

Qatar National Bank (QNB) QNBK.QA also showed some early interest. Both QNB and Bahrain's ABC did not advance in the talks because they have become more interested in acquiring at least part of National Bank of Greece's (NBGr.AT: Quote) Turkish arm, Finansbank FINBN.IS, two sources said.

"QNB always said it is interested to enter the Turkish market. Once the right opportunity is identified, QNB will look at it to ensure it fits with the Group's international expansion strategy. As of today, QNB is not part of any discussions in regard to opportunities in the Turkish market", a spokesman for QNB said.

HSBC is the twelfth-largest bank in Turkey and is selling the loss-making business as part of its attempt to cut costs and assets to improve profitability and reduce its complexity. The business comprises corporate and investment banking operations as well as a retail arm.

ING's existing Turkish bank has about $16 billion of assets, slightly larger than HSBC's, which has $15 billion in assets and about 300 branches.

Both businesses lack scale and need to expand to survive in the highly competitive Turkish banking sector that includes the likes of Isbank (ISCTR.IS: Quote), Garanti Bank (GARAN.IS: Quote) and some state-run lenders, local sources have said.   Continued...

The logo of ING bank is seen at the entrance of the group's main office in Brussels November 6, 2013. REUTERS/Francois Lenoir