Finansbank Essay

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FINANSBANK CASE ANALYSIS Executive Summary Finansbank, a recognized Turkish bank with extensive domestic and foreign network was established in 1987. IT has been expanding its operations into commercial, corporate and later retail banking sector. Despite volatile market conditions, high inflation rates and currency depreciation, Finansbank continued successfully its operations, which among others is due to the expertize of the team and ability to raise challenges in an ever-evolving environment. However, rigid regulations adopted in the aftermath of 2001 crisis curbed significantly Finansbank’s possibilities for further domestic growth, imposing higher capital requirements (capital ratio above 12%) and restrictions on opening of new domestic branches. Thus, Mr. Ozyengin, famous Turkish entrepreneur, Chairman and CEO of Finansbank, with an ambition to create a global leading bank in a Southeast Europe, understanding the scarce potential for further development of Finansbank in a domestic market decides to sell banks’ Turkish operations. In April 2006 Mr. Ozyegin received the highest offer from NBG, a newly-privatized Greek bank, to buy ownership of Finansbank and those of its international subsidiaries for a total of $ 2774 bln, where NBG will pay $ 2323 bln for the group’s 46% stake in the ordinary shares of the bank and $ 451 mln for 100% in the founder shares of the bank. Mr. Ozeyging will buy back 4 international subsidiaries for a price of $ 580 mln, subject to non-compete clause and requirements to make changes to brand name of international subsidiaries. According to the Offer terms FIBA Holding will retain a residual stake of 9.68 % in Finansbank, subject to any additional shares sold to NBG in order for NBG to achieve a 50.01% stake in Finansbank upon completion of the transaction. This residual stake will be subject to put and call arrangements
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