Turkish banking sector’s potential attracts foreign investors, says JPMorgan official

The Turkish banking sector continues to attract foreign investors because of its interesting potential, according to Gokhan Ozkan, Managing Director at J.P. Morgan.

Recent deals, such as the acquisition of Odeabank by Abu Dhabi-based sovereign wealth fund ADQ, highlight the sector’s appeal as Türkiye experiences steady economic growth.

Turkish banks offer attractive valuation for investors

The valuation levels of Turkish banks have caught the attention of foreign investors, with two major transactions completed in the last four months.

These include the sale of Rabobank Türkiye to Ronesans Holding and ADQ’s acquisition of 96% of Odeabank’s share capital. Ozkan pointed out that these deals are indicative of the growing confidence in Türkiye’s banking sector.

Strengthening bilateral ties between Türkiye, Gulf states

Ozkan emphasized that the acquisition of Odeabank by ADQ reflects a strategic alignment between Türkiye and the Gulf states. “The acquisition signals confidence in the Turkish banking market’s compelling potential and a commitment to strengthening bilateral relations between the UAE and Türkiye,” he said.

The deal is seen as part of a broader trend of Gulf investors seeking to diversify their portfolios by tapping into emerging markets with growth potential.

Türkiye’s economic growth fuels banking sector appeal

Türkiye’s steady economic growth, including a 4.5% real gross domestic product (GDP) increase and nominal GDP surpassing $1.1 trillion in 2023, has made the country an attractive market for both debt and equity investors.

“Any transaction in the banking sector is linked to investors’ views on the overall economic environment,” Ozkan explained.

Despite previous economic volatility, the current stable environment and Türkiye’s long-term growth prospects continue to draw foreign interest.

ADQ’s future expansion in Türkiye’s banking sector

ADQ’s acquisition of Odeabank is seen as an opportunity for further expansion in Türkiye’s banking sector, facilitated by strong ties between Abu Dhabi and Ankara.

“This alignment of interests could allow ADQ to confidently expand its footprint in Türkiye’s banking sector, knowing there is a strong foundation of further cooperation,” said Ozkan.