UniCredit agrees to cut stake in Turkey's Yapi Kredi to below 32%

MILAN (Reuters) – Italy’s UniCredit (MI:) said on Saturday it had reached a deal with Turkey’s Koc Holding (IS:) to cut its stake in Yapi Kredi Bank (IS:) to below 32% as part of moves to simplify its shareholding structure and bolster capital.

Yapi Kredi Bank is Turkey’s third largest bank.

Under the deal Koc Holding will buy UniCredit’s 50% stake in Koc Financial Services (KFS), the joint venture which controls Yapi Kredi, to become the JV’s sole owner.

At the same time KFS will sell 31.93% of Yapi Kredi to UniCredit and 9.02% to Koc Holding.

KFS currently owns almost 82% of Yapi Kredi.

Sources told Reuters earlier this month UniCredit had struck a deal to reduce its exposure to the Turkish bank, in a move seen as a step to its exit from the country, which has been mired in recession.

UniCredit, which will book charges of around 1 billion euros (£859 million), said the overall impact of the deal for the bank would be virtually nil in terms of cash.

It said it expected its group CET 1 ratio – an indicator of financial health – to be lifted by an overall mid-single-digit basis point.

Completion of the transaction is expected in the first half of next year, UniCredit said.

The deal is the latest move in a string of disposals that UniCredit’s boss Jean-Pierre Mustier has embarked upon since taking the helm of Italy’s biggest bank by assets in 2016.

The bank is set to unveil a new business plan next Tuesday.

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