Abu Dhabi Development Holding Company (ADQ) has agreed to acquire a 96% stake in Audi Odeabank’s loss-making Turkish subsidiary as the United Arab Emirates deepens economic ties with Turkey. The deal, pending regulatory approval from the Banking Regulation and Supervision Authority and Turkey’s Competition Authority, demonstrates ADQ’s growing presence in banking markets.
Lebanese Bank Audi is Odeabank’s largest shareholder with a 76.4% stake. Other shareholders include the International Finance Corporation (IFC), Fig Investment Company and the European Bank for Reconstruction and Development, which have agreed to sell their stakes. Financial details of the deal were not disclosed. Audi Bank is represented in the negotiations by the law firm Dechert.
“As part of ADQ, Odeabank will have access to new capital, allowing the company to realize synergies with our broader portfolio,” Mansour AlMulla, deputy group CEO of ADQ, said in a prepared statement.
According to Bank Audi CEO Khalil El Debs, the deal will allow the bank to regroup and expand in select markets. “This transaction fits well with Bank Audi Group’s current strategic focus on its home market, as well as its presence in Europe,” he added.
In a September note, Fitch Ratings said it expects Odeabank to post an operating loss this year and expects profitability to remain weak next year.
However, state-owned ADQ is tasked with expanding Abu Dhabi’s investment presence across various sectors and markets. In 2022, he launched a $300 million fund with Türkey Wealth Fund, which invests in companies developing new technologies or improving existing technologies in key sectors. But ADQ’s bank run may not be without problems. In May, ratings agency Fitch Ratings warned banks in the six-member Gulf Cooperation Council (GCC) of uncontrolled growth plans.
“International expansion provides greater diversification, but can be a source of additional risks. In particular, currency and interest rate risks may be significant when entering a jurisdiction with a lower rating and a more volatile macroeconomic backdrop.”
Turkey’s economy is expected to grow 3% this year and in 2025, a survey of economists showed earlier this month, lower than recently updated government forecasts.