Santander in Turkish talks

Good news for Banco Santander on Friday after rumours that General Electric might sell its 21 percent stake in Turkish lender Garanti Bank to the Spanish firm saw its shares rise exponentially.

Garanti Bank, Turkey's largest listed lender, has long been a favourite of foreign investors because it is around 50 percent publicly-owned in a country where other banks are either run by families or the state. According to analysts, plans to sell the stake by General Electric are likely to attract a number of potential suitors.

But the move is a definite one by GE, and comes as part of its "global reduction strategy" according to GE Money analysts at the weekend.

Stabilisation

GE, the US's largest conglomerate, has been trying to stabilise itself after posting eight straight quarters of falling profits and has been scaling back its heavy GE Capital financial arm, which has led to this sale.

For Santander, the rumours meant that the firm's shares rose 3.4 percent to 9.55 euros on Friday, with analysts saying the deal would be good for Santander as there was huge growth potential in Turkey.

Poor cash position

However, talk of other suitors did follow, including rumours that Turkey's Dogus Group, which already has a 30.5 percent stake in Garanti, might be interested. However, such rumours were largely considered as doubtful as Dogus currently has a poor cash position.

Other potential rumours apparently include Italy Intesa.

Shares in Garanti Bank were down 11.6 percent on the week at 5.70 Turkish lira, in spite of trading higher on Friday.

Matthew Buttell

Matt Buttell graduated from Bath Spa University in 2006. Since then he has written for several publications, before moving to the web. He now writes solely for the internet, continuing to cover key business issues while managing his own personal blog.

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