TODAY’S ZAMAN – Citigroup sells stake in Turkey’s Akbank for $1.2 bln

Citigroup sells stake in Turkey’s Ak bank for $1.2 blnCitigroup has sold its near-10 percent stake in Turkey and Akbank for $1.

2 billion, the US bank said on Thursday, in its latest sale of overseas assets to cut costs and raise profits.Citigroup also said it aimed to increase its business in Turkey, where it has had a presence for 40 years and employs 500 people.

Before the sale, Citigroup had been the second-largest shareholder in Akbank, owning 99 percent of all shares. While Turkish conglomerate SabancI Holding owned 48.

9 percent of the bank, the remaining 41.2 percent of the shares were being publicly traded on the Turkish stock exchange.

Citigroup did not disclose the buyerShares of Akbank, Turkeyand#39s fourth-largest listed bank by assets, had tumbled 5 percent as of 12:53 pm on Thursday.Citigroup established a partnership with Akbank in 2006 when it bought a 20 percent share in the bank for $3.

1 billion. In May 2012 the US bank sold 10.

1 percent of its stake to strengthen its capital structure, which had suffered after the financial crisis in 2008.The sale comes at an inopportune time for Turkish banking, as overseas investors fret about increased political interference in the sector Ratings agency Standard Poorand#39s warned on Wednesday that regulatory actions against Islamic lender Bank Asya illustrated andquotthe potential for political risk, or the perception of it, to directly or indirectly spill over into the financial systemandquotIn the meantime, Huseyin AydIn, the general manager of state-run Ziraat BankasI, announced on Thursday that Ziraat BankasIand#39s first participation bank will start operations on May 29 with capital equivalent to $300 million.

Participation banks — dubbed Islamic lenders — are based primarily on interest-free banking since the earning of interest is forbidden in Shariah-compliant finance.

SOURCE: Today’s Zaman