Kuwait's NBK in talks to buy Turkish bank

DUBAI (Reuters) - National Bank of Kuwait (NBKK.KW: Quote, Profile, Research, Stock Buzz), the third-biggest Gulf Arab lender by market value, is in talks to acquire a "medium-sized" bank in Turkey as part of its overseas expansion, a senior bank official.

George Nasra, Chief Executive of NBK's investment banking unit, NBK Capital, said Kuwait's biggest lender hoped to conclude talks with the Turkish bank in the second half of the year. Nasra would not identify the counterpart.

"We are considering an entry to the Turkish banking market ... we have to acquire something," Nasra told the Reuters Middle East Investment Summit on Sunday.

Asked if there were talks, he said: "We are working on that." But the Kuwaiti bank had not yet entered due diligence or discussions with the Turkish central bank.

The Turkish lender is a "fully fledged bank" which NBK would use to offer investment banking and corporate finance services, Nasra said, declining to put a price on any transaction.

"Turkey is a very interesting market. The banking system is very sophisticated," Nasra said. NBK would help channel surplus Gulf Arab funds to Turkey where a program to sell off state assets is "irreversible," Nasra said.

He also reiterated NBK was in talks with "several" banks in Egypt to buy into them, one of which he had previously identified as Egyptian Gulf Bank EGBE.CA.

Nasra declined to say whether talks with Egyptian Gulf were continuing.

"We are interested in a serious presence in Egypt," he said, adding that NBK is in no hurry to conclude an acquisition. Based on other deals, a purchase might cost three times the Egyptian lender's book value, Nasra said, declining to be more specific.

He added that NBK planned to grow organically in Jordan after talks to buy a majority stake in the country's Union Bank for Savings and Investments UBSI.AM collapsed in February because of differences over price, Nasra said.

The Kuwaiti lender, which has a branch in the Jordanian capital, Amman, aims to grow its network to 10 branches within three years.

Nasra reiterated NBK Capital, which is 90 percent owned by NBK and 10 percent by the management, was in talks with several potential partners to set up a joint-venture for investment and merchant banking operations in Saudi Arabia.

NBK was hived off from the parent company in 2005.

NBK has stepped up overseas expansion during the last three years as it faces more competition in its home market from domestic rivals and entrants such as HSBC Holdings (HSBA.L: Quote, Profile, Research, Stock Buzz) and BNP Paribas (BNPP.PA: Quote, Profile, Research, Stock Buzz).

In end-February, the bank said it had agreed to buy a fast food company in Turkey for $50 million, its first acquisition for a $300 million private equity fund offering.