Citigroup sells stake in Turkey’s Akbank for $1.2 bln

Citigroup sells stake in Turkey’s Akbank for $1.2 bln

ISTANBUL – Reuters
Citigroup sells stake in Turkey’s Akbank for $1.2 bln

AP Photo

Citigroup has sold its nearly 10 percent stake in Turkey’s Akbank for $1.2 billion, the U.S. lender said on March 5, its latest disposal of overseas assets to cut costs and boost profits.

New York-based Citi has been paring back in international markets in recent years, pulling out of retail banking inTurkey as well as long-established businesses such as Japan.

Citi, which had been the second-largest shareholder in Akbank, said the sale would not have a material impact on its finances. It did not disclose the buyer.

Shares of Akbank, Turkey’s fourth-largest listed bank by assets, tumbled more than 5 percent at the start of trade in Istanbul.

Citi said in a statement it remained committed to Turkey, where it aims to increase it corporate and commercial banking business and employs more than 500 people.

Still, the sale comes at an inopportune time for Turkish banking, as overseas investors worry about increased political interference in the sector.

Ratings agency Standard & Poor’s warned on March 4 that regulatory actions against Islamic lender Bank Asya illustrated the “potential for political risk, or the perception of it, to directly or indirectly spill over into the financial system”.

Bank Asya, founded by the followers of U.S.-based Islamic scholar Fethullah Gülen, has been battered by President Recep Tayyip Erdoğan’s attempts to wipe out Gülen’s religious movement, which he accuses of attempting to build a “parallel state” in a bid to topple the government.