When Belgian bank Fortis agreed this week to buy a controlling stake in Turkey's Disbank, they became the second European lender to buy into a Turkish counterpart since December. The deal, for $1.28bn in cash, has been widely seen as a healthy sign of growing European economic interest in Turkey.
Fortis's rationale for the buy underscores Turkey's economic importance for Europe, where high-growth markets are harder to find. Meanwhile, Turkey's economy has grown more than expected in each of the past three years.
Disbank, the seventh-largest private lender in Turkey, was 89% owned by the Dogan family, which is expected to sell off its non-media assets and concentrate on its newspapers, television stations and other media.
Disbank has more than 1m customers and also serves about 120,000 small enterprises. The company's strongest business is commercial lending, according to Oyak Securities analyst Figen Cevik, quoted by Bloomberg News after the deal was announced on April 12.
The day before, another positive economic sign had come, with Turkey's central bank cutting benchmark interest rates by 50 basis points, a move demonstrating confidence that inflation is now under control. Borrowing rates have tumbled from 59% at the start of 2002 to the current 15%.
At the same time, Turkey's target for GDP growth this year is 5%, an expectation that has remained unchanged for the last three years, although actual growth has been faster each time. Growth rates for the Dutch and Belgian economies, where Fortis operates in Europe, are 1% and 2.2% respectively.
These business deals and economic fundamentals can also only help Turkey's case at the EU. Yet in this, political problems are clearly far from over, with recent violent events
in the Black Sea city of Trabzon, where nationalists attacked members of a prisoners' rights group, not going down well in Brussels.
"We are monitoring the incidents in Trabzon with great concern," the EU's Ankara representative, Hansjoerg Kretschmer, told the Anatolia News Agency after the events. "We hope officials will act responsibly and correctly."
Turkey has undertaken a number of political reforms in hopes of joining the EU, yet freedom of expression is an area where European politicians say more progress is needed, a demand that has often rankled with Turkey's leaders.
But while the politicians on both sides are debating democracy, the entrepreneurs are shaking hands and doing deals.
In February, BNP Paribas became the first foreign bank to enter Turkey since the EU's December decision to start accession negotiations, paying $217m for a stake in Turk Ekonomi Bankasi. Meanwhile, UniCredito Italiano, Italy's second-biggest bank, may expand its Turkish unit by buying Yapi Kredi Bankasi AS, Bloomberg recently reported.
The Dogan family, owners of Dogan Yayin Holding, are expected to use the cash from the sale of Disbank to buy more media. The company controls some 40% of the Turkish newspaper market, according to its web site.
Dogan CEO Mehmet Ali Yalcindag said recently the company might make acquisitions in Eastern Europe, Eurasia and the Middle East. Profit figures released by the company showed a 6% drop to $4.2m in 2004.
The company may also wish to add to its media holdings in Turkey. The Turkish government is expected to sell media owned by the Uzan family, which were seized along with other businesses after a series of scandals involving the controversial Uzans.
Those assets include the Star newspaper and Star TV.
There may have been significant foreign interest in these companies too, particularly after a new media law was passed back in March by Turkey's parliament, which would have allowed foreigners to wholly own Turkish newspapers and TV channels.
However, the law was then vetoed by President Ahmet Necdet Sezer, who said it violated the country's constitution. There is strong pressure both from the opposition and from within Turkey's ruling Justice and Development Party (AKP) to limit possible foreign ownership to minority stakes in any future law.
Even without so much foreign interest, however, the Turkish media looks set for a period of acquisitions - as does the country's banking sector.
