The Abraaj Group The Abraaj Group Acquires A Minority Stake In Turkish Bank Fibabanka

The Abraaj Group acquires a minority stake in Turkish bank Fibabanka

• Fibabanka has achieved robust growth in the corporate, commercial and SME segments of the Turkish banking sector
• Abraaj will partner with Fiba Group, EBRD and IFC to accelerate Fibabanka’s growth
• Partnership marks Abraaj’s eighth global investment in the banking sector and ninth investment in Turkey

Istanbul, Turkey, 6 June 2016: The Abraaj Group (‘Abraaj’ or the ‘Group’), a leading investor operating in global growth markets, today announced the acquisition, through one of its Funds, of a minority stake in Fibabanka A.S. (‘Fibabanka’ or the ‘Bank), one of the most prominent banks in Turkey with a highly experienced management team. The investment from Abraaj will be used by Fibabanka to expand its franchise and support its growth.

The Bank was acquired in 2010 by the Fiba Group, led by pioneer Turkish banker Hüsnü Özyeğin. Fiba Group is a conglomerate operating mainly in financial services, retail, energy, healthcare and real estate with total assets of over US$17 billion and annual revenues of c. US$1.2 billion. Under Fiba Group’s ownership, Fibabanka has demonstrated an impressive track record, nearly quadrupling its branch network and growing its assets and loans by more than twelve times in a five year period.

The Bank currently has 70 branches across 18 cities in Turkey, total assets of US$4.3 billion and a loan book of US$3.2 billion at the end of Q1 2016. It has a strong focus on commercial, corporate and SME customer segments which has contributed to its solid growth and high profitability in the last few years.

Commenting on the transaction, Arif Naqvi, Founder and Group Chief Executive of The Abraaj Group, said: “Abraaj’s partnership with Fibabanka marks our eighth global investment in the banking sector and our ninth in Turkey. It represents a compelling opportunity to tap into the underpenetrated banking sector in Turkey where 40 percent of the population remains unbanked and household leverage ratios are low as compared to Europe.”

“Hüsnü Özyeğin has built Fiba Group into one of the leading conglomerates in Turkey, and established Fibabanka as one of the most robust financial institutions in the country. We look forward to working together on the next stage of the Bank’s growth story”, added Mr Naqvi.

Hüsnü Özyeğin, Chairman of Fibabanka and Fiba Group, said: “We are delighted to announce our new partnership with The Abraaj Group and have them join our Board. This is an exciting period of growth for Fibabanka and we are confident that Abraaj’s investment and longstanding experience in the financial services sector will take our business to the next level, in terms of institutionalisation, selectively expanding our branch network, and supporting further growth of the Bank.”

Selçuk Yorgancıoğlu, Partner and Regional Head of Turkey and Central Asia at The Abraaj Group, added: “The Turkish banking sector loan book has increased tenfold in the last decade, yet Turkey remains an under-leveraged market with a household debt to GDP ratio that is approximately a third of the Eurozone average. The country’s young and rising middle class continues to fuel demand for loan products and Fibabanka is well-positioned to expand in the market. We are very pleased to partner with Hüsnü Özyeğin and his management team to grow Fibabanka into a leading Turkish bank.”

Abraaj has a strong track record of investing in financial services firms globally, including Acibadem Insurance, a leading Turkish insurance company specializing in the health segment, and Network International, the leading payment solutions provider in Middle East and Africa. Following its investment in Fibabanka, Abraaj will have deployed c. US$900 million of capital in Turkey since 2007.

The transaction is subject to customary closing conditions and is expected to conclude in the third quarter of 2016.