January 11, 2015

Turkey's Bank Asya to sell Tamweel Africa Holding stake

ISTANBUL (Reuters) - Turkey's Bank Asya, which suffered a run on deposits last year after it became embroiled in a political feud, said it was selling its 40 percent stake in Tamweel Africa Holding for 31.8 million euros ($37.7 million).

It is selling the stake in Tamweel, which promotes Islamic finance in sub-Saharan Africa, to the Saudi-based Islamic Corporation for the Development of the Private Sector (ICD), the bank said in a statement to the Istanbul stock exchange late on Thursday.

"We obtain 41.3 million lira profit through this sale and we expect this to have a positive impact on first quarter profitability," Cengiz Onder, Bank Asya's head of investor relations, told Reuters. Tamweel Africa Holding is based in Senegal.

The run on deposits took place last year after Bank Asya became caught up in a power struggle between now-President Tayyip Erdogan and Fethullah Gulen, a U.S.-based Islamic cleric whose sympathisers founded the lender.

Erdogan has long accused his former ally Gulen of orchestrating a graft probe to undermine his rule and has waged a battle to purge institutions such as the police and judiciary of his supporters.

In a show of loyalty to Erdogan, depositors including state-owned firms and institutions withdrew 4 billion lira, about a fifth of Bank Asya's total deposits, according to media reports.

Bank Asya has laid off 1,708 staff and closed 80 branches, out of the 5,074 staff and 281 branches it had at the end of 2013.

It swung to a 301 million lira ($133 million) net loss in the third quarter partly due to a rise in bad loans, but said its underlying operations were healthy.

Published on Reuters Africa, 09 January 2015, Friday