ECONOMY

NovaBank plans Turkish expansion with Sitebank bid

NovaBank, the retail banking venture between Portugal’s Banco Comercial Portugues and Greek insurance group Interamerican set up just over a year ago, said yesterday that it plans to expand to neighboring Turkey with its bid for Sitebank, a Turkish commercial bank. NovaBank said it submitted a bid to Turkish banking watchdog, the Savings Deposits Insurance Fund, on Thursday. The unspecified offer, which includes proposed investments to upgrade Sitebank’s computer systems, network and marketing activities and another sum to cover accumulated losses and offset workforce restructuring, is estimated at below 50 million euros, it said in a statement. The Turkish bank is one of 18 insolvent banks taken into receivership by the state under reforms backed by a $15.7-billion bailout package organized by the International Monetary Fund and the World Bank. The surfeit of troubled banks has landed Turkey in one of its most serious financial crises. Set up in 1997 as a wholly owned subsidiary of the Surmeli Group, a Turkish hotel and tourism group, Sitebank offers a wide range of products to both retail and corporate customers. It currently has 13 branches in six cities in Turkey, assets worth 31 million euros and a workforce of 223. NovaBank said its proposal excludes a portion of Sitebank’s assets and liabilities as well as branches and personnel that are not part of its strategy of expansion. The bank plans to offer a specialized service to middle- and upper-income clients in Turkey, estimated at about 300,000 and concentrated principally in three major cities. NovaBank said research showed the market has potential and that a clear-cut and focused strategy would help it penetrate the sector successfully. The bank’s planned expansion into Turkey would mark its first foray abroad. Set up with the main focus on domestic retail banking, NovaBank rapidly carved out a presence in the sector. But with the major banks moving aggressively into mortgage and consumer loans in the last year, the field has grown crowded, which could explain NovaBank’s decision to cast its net further away.