ISTANBUL (Reuters) - HSBC HSBA.L is set to agree to sell its Turkish business to Dutch lender ING Group ING.AS for around $700 million-$750 million (480.06 million pounds) in the next few days, two people familiar with the matter told Reuters on Wednesday.
HSBC, the 12th-largest bank in Turkey, is selling the money-losing business in a global drive to cut costs and assets, boost profitability and reduce complexity.
Acquiring HSBC’s business would allow ING to roughly double its around $15 billion of assets in Turkey, putting it on better footing in a highly competitive market.
“The deal is imminent. It may be finalised in the next few days,” said one of the people, both of whom declined to be identified because the information is not yet public.
“The final price is likely to be set at around $700-750 million.”
Both HSBC and ING declined to comment.
Reuters reported earlier this month that HSBC had narrowed the field of potential buyers down to the Dutch bank, but this is the first time that the value of the deal has been reported.
At present, both banks lack scale and need to expand to survive in the Turkish market, local sources have said, citing the dominance of Isbank ISCTR.IS, Garanti Bank GARAN.IS and some state-run lenders.
HSBC, Europe’s biggest bank, has around 300 retail branches and corporate and investment banking operations in Turkey. The Turkish business lost $64 million last year, dragged down by a $155 million hit at its retail arm after regulatory changes capped interest rates on credit cards and overdrafts.
Despite HSBC’s difficulties, Turkey remains an attractive market for some lenders by virtue of its young population and geographic position between Europe and Asia.
An acquisition would mark a return to the takeover trail for ING, which expanded internationally with a series of deals over two decades before needing to be rescued by the Dutch government at the height of the financial crisis in 2008.
Additional reporting by Carolyn Cohn in London and Thomas Escritt in Amsterdam; Writing by David Dolan and Daren Butler; Editing by Louise Heavens and Susan Fenton
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