Italy’s UniCredit said on Saturday it had reached a deal with Turkey’s Koc Holding to cut its stake in Yapi Kredi Bank to below 32% as part of moves to simplify its shareholding structure and bolster capital.
Yapi Kredi Bank is Turkey’s third largest bank. Under the deal Koc Holding will buy UniCredit’s 50% stake in Koc Financial Services (KFS), the joint venture which controls Yapi Kredi, to become the JV’s sole owner.
At the same time KFS will sell 31.93% of Yapi Kredi to UniCredit and 9.02% to Koc Holding. KFS currently owns almost 82% of Yapi Kredi.
Sources told Reuters earlier this month UniCredit had struck a deal to reduce its exposure to the Turkish bank, in a move seen as a step to its exit from the country, which has been mired in recession.
UniCredit, which will book charges of around 1 billion euros ($1.1 billion), said the overall impact of the deal for the bank would be virtually nil in terms of cash.
It said it expected its group CET 1 ratio – an indicator of financial health – to be lifted by an overall mid-single-digit basis point. Completion of the transaction is expected in the first half of next year, UniCredit said.
The deal is the latest move in a string of disposals that UniCredit’s boss Jean-Pierre Mustier has embarked upon since taking the helm of Italy’s biggest bank by assets in 2016. The bank is set to unveil a new business plan next Tuesday.