IFC and EBRD to become shareholders of Odeabank as they participate in TL 1.0 billion capital increase​

Odeabank, Turkey’s leading challenger bank, is being boosted by support from international financial institutions in a move that will take it to the next stage of growth.

IFC, a member of the World Bank Group, the IFC Financial Institutions Growth Fund (FIG Fund), a private equity fund managed by IFC Asset Management Company (AMC), and EBRD will become shareholders of Odeabank, a subsidiary of Lebanon’s Bank Audi Group, through a subscription to a TL 1.0 billion capital increase of the lender.

This capital increase will provide Odeabank with additional financial flexibility which will allow it to expand its financing in the real sector in Turkey, fund large scale infrastructure projects and increase access to finance for medium and small sized companies (SMEs). Odeabank is also planning to invest in new technologies to strengthen its digital banking network and reach one million unbanked people in Turkey.

As part of the TL 1.0 billion capital increase, the IFC and EBRD are investing the Turkish Lira equivalent of US$ 110 million and US$ 90 million, respectively. US$ 38.5 million of IFC financing is provided by the FIG Fund. The remaining balance will be covered by Middle Eastern investors and Bank Audi itself. Following the capital increase, Bank Audi Group will remain a majority shareholder of Odeabank with a stake of more than 75 per cent.

Completion of the transaction is subject to regulatory approvals including approval by the BRSA and other customary closing conditions.

Odeabank started its operations in late 2012 as a subsidiary of Bank Audi Group, the largest Lebanese lender and one of the leading international financial institutions with presence in the MENA region and also in Europe. Within only three and a half years of operations, Odeabank has already established itself as one of the key players in the attractive Turkish banking sector reaching eighth position by customer deposits and ninth position by loans as of March 2016. Odeabank operates 56 branches in 16 cities and employs over 1,500 staff as of June 2016.

Samir Hanna, Group Chief Executive Officer of Bank Audi Group and Chairman of Odeabank, stated: “We welcome EBRD and IFC as well as other prominent investors as our new partners in Odeabank. We are looking forward to a new phase of growth for Odeabank in the highly promising Turkish banking market. This capital increase represents the largest capital increase in the Turkish banking sector over recent years and is a testimony to Bank Audi’s successful greenfield investment in Turkey. Odeabank is a key pillar of Bank Audi’s future growth and we continue to be committed to its future development.”

Huseyin Ozkaya, General Manager and Board Member of Odeabank, said: “It is vital and extremely encouraging that two reputable and prestigious institutions such as IFC and EBRD, alongside other reputable investors, demonstrate their confidence in Odeabank. With this capital increase, we will be able to expand our lending support to infrastructure investments and projects contributing to the development of the Turkish economy. The equity investment will also allow us to support SMEs which account for 70 per cent of Turkey's employment, but receive less than 30 per cent of loans. We expect to make investments in our branch network, digital banking channels and technology in order to continue providing our corporate, commercial, SME and retail customers with the best quality service as the youngest top 10 bank in the competitive Turkish banking market.”

Both IFC and EBRD have previously provided Odeabank with credit lines for SME finance and trade facilities.

Manuel Reyes-Retana, IFC Regional Head of Financial Institutions Group in Europe, Middle East, and North Africa, said: “Giving smaller businesses access to capital allows them to unlock their potential and create much-needed jobs. SMEs form the backbone of the Turkish economy but often struggle to reach their potential. We are further deepening our partnership with Odeabank to support the bank’s efforts in expanding banking services across Turkey with innovative and technological solutions.”

Nick Tesseyman, EBRD Managing Directo for Financial Institutions, added: “The EBRD is proud to take its cooperation with Odeabank to the next level and acquire a stake in this young and dynamic Turkish bank. As a shareholder the EBRD will assist Odeabank in expanding lending where financing is needed most – to SMEs and women-led businesses, in particular outside the large metropolitan areas.The acquisition of stakes in Odeabank is the second joint investment we have made with IFC in the Turkish banking sector following the acquisition of minority shareholding in Fibabanka.

Bank Audi is advised by J.P. Morgan as its exclusive financial advisor and by Dechert as its legal counsel for English Law and by Bilgiç Attorney Partnership as its legal counsel for Turkish Law, while IFC and the EBRD are jointly advised by Clifford Chance as their legal counsel for English Law and by Yegin Çiftçi Attorney Partnership as their legal counsel for Turkish Law. ​​