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| Summary of Project Information (SPI) |
| This Summary of Project Information is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
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| Project number | 20911 |
| Project name | Oyak Bank II |
| Country | Turkey |
| Sector | Finance & Insurance |
| Department | Global Financial Markets Group |
| Company name | ING Bank A.S. |
| Environmental category | FI-1 |
| Date SPI disclosed | July 7, 2003 |
| Projected board date | September 22, 2003 |
| Status | Active |
| Previous Events | Invested: February 17, 2004
Signed: February 17, 2004
Approved: October 14, 2003 |
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| Description of company and purpose of project |
Oyak Bank (Oyak, the bank or the company) was formerly the Turk Boston Bank, which was established in 1984 as a branch of the First National Bank of Boston, then converted to a wholly-owned subsidiary in 1990, and subsequently sold to a group of local investors, including Ordu Yardimlasma Kurumu (OYAK). OYAK acquired majority ownership of the bank at the end of 1993 (it now owns 100%), and changed bank’s name to Oyak Bank in mid-1996. With a strong owner and conservative management, the bank has survived nearly three years of recession in Turkey as well as a devastating financial crisis in 2001/2002 which led to nearly a dozen banks being taken over by the State Deposit Insurance Fund (SDIF). Oyak Bank’s merger with Sumerbank on January 11 2002, one of the banks auctioned by SDIF, is a clear sign how the Bank is committed in its growth strategy. With this merger the Bank’s total assets reached around $2.1 billion (pre merger total assets were around $300 million) and total shareholder’s equity amounted to roughly $228 million (as opposed to pro merger figure of $90 milion).
The project would consist of a flexible, multi-purpose facility, which would allow Oyak Bank to
- lengthen the average maturity of its liabilities, both strengthening its balance sheet and enabling it to fund longer term assets;
- build up its consumer finance activities; and
- make opportunistic acquisitions as the Turkish banking sector undergoes further consolidation.
This would be IFC’s second loan to OB; the first, a $40m syndicated facility is almost fully repaid. |
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| Project sponsor and major shareholders of project company |
| Oyak Bank is 100% owned by OYAK. Oyak was established in 1961 as a foundation under the Special Act of Parliament as a supplementary social security institution for the military and civilian employees of the Turkish Armed Forces. The Oyak Group has grown to be one of the largest institutional investors in Turkey with 27 subsidiaries and 12 affiliated companies concentrated in the automotive, cement, financial, food/ chemicals and services centers. |
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| Total project cost and proposed IFC investment |
| The proposed IFC investment is a $50 million A Loan for IFC’s own account. |
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| Location of project and description of site |
| Oyak Bank is headquartered in Maslak, Istanbul. The bank has 220 branches, 62 of them situated in Istanbul. However, the bank has presence in almost all provinces of the country which enables investments to be made throughout Turkey. Oyak Bank employs 3,590 personnel. |
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| Project Development Impact and IFC's Role |
The development impact would potentially include the following areas:
- assisting in the consolidation of the Turkish banking sector, if OB is successful in acquiring another bank;
- providing term funding to Turkish corporates at a time when term funding is particularly scarce and
- sending an important signal of support to the system at a time when confidence is low and banking activity is severely constrained. |
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| Environmental and social issues - Category FI-1 |
This is an environmental and social FI type 1 project. The bank must demonstrate that its current environmental management system (EMS) remains in place and is adequate to address the new IFC loan.
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| To contact the project company, please write to: |
Mr. Sureyya Meydanoglu, Assistant General Manager
Eski Buyukdere
Caddesi Ayazaga Koyyolu
No:6 Maslak 34398
Istanbul/Turkey
Phone: +90 212 335 10 00
Email: smeydanoglu@oyakbank.com.tr |
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