Pre-selection process for Bank Asya sale extended for Saudi bank


The Savings Deposit Insurance Fund's (TMSF) decision to extend the deadline for the submission of the required documents for the preliminary qualification to offer bids in the sale of Bank Asya was reportedly made for a Saudi bank, according to reliable sources. Although there has not been an official announcement made by the TMSF concerning a specific name, there are four Saudi Islamic banks, one of which could be a possible candidate to purchase Bank Asya shares. Al-Rajhi Bank, Bank Al-Jazeera (BAJ), Al-Bilad Bank and Alinma Bank are the possible banks that asked for the one-week extension of the deadline from June 10 to June 17 to prepare the documents.

Al-Rajhi Bank is one of the biggest Islamic finance banks with total assets worth of $80 billion, employing over 9,500 people. The bank is known as the major investor in Saudi Arabia's business. Another possible bank that could be a candidate to buy Bank Asya's shares is the BAJ, which has total assets of $17.5 billion and is recognized as one of the leading sharia-compliant, fast growing financial institutions in Saudi Arabia.

Al-Bilal Bank, with capital worth of $1.6 billion, might be another candidate. It is a public bank with its headquarters located in Riyadh. The forth possible candidate is Almina Bank, which provides various services at all branches of Islamic finance.

On the other hand, while the process for Bank Asya's sale has continued, the U.S.-based credit rating agency, Moody's, which is not known for being very interested in bank sale processes, made an interesting announcement. According to Moody's, in the case that Bank Asya is sold to a well-known bank and strengthens its financial strength, it will be in a better condition to pay its debts to its creditors.

The TMSF announced the potential sale of some Bank Asya shares in their Official Gazette at the end of May after it seized by the bank on May 30, 2015. The offers to buy the shares were declared accepted until June 23, after having received all applications on June 17 to authorize the candidates to offer bids. The TMSF is planning to sell 183.6 million of the 360 million preference shares - A Group, or privileged shares - meaning the TMSF will sell 51 percent of the total preferred stock, listing each share at TL 0.70 ($0.24).

The bid will start with the public announcement of the offers submitted on June 24, and depending on the number of the participants, the process will continue with a public auction or simply through bargaining. TMSF Chairman Ercan Gül announced on May 11 that Bank Asya will either be sold by the end of May or its license will be canceled, according to Article 71 of the Banking Law.

Believed to be the main financial institution of the controversial Gülen Movement and their affiliated companies, Bank Asya's financial situation deteriorated after authorities began investigating the shadowy organization. The bank reported huge losses in 2015, after shares were suspended from trading on the Borsa Istanbul stock exchange (BIST) on Sept. 26, 2014, with the TMSF saying this would prevent further losses due to high volatility which threatened investors.