Turkey

National Bank of Greece said yesterday that it had agreed to sell a majority stake in Finansbank of Turkey to Qatar National Bank for 2.75 billion euros, or about $3 billion, the New York Times DealBook blog reported yesterday. The Greek bank began exploring “strategic options” for its Turkish business last year after the European Central Bank identified a capital shortfall at National Bank of Greece and at other Greek lenders.

Turkey’s central bank left interest rates unchanged for a 10th consecutive month on Tuesday, sending markets tumbling after it defied expectations that it would raise rates in tandem with the U.S. Federal Reserve, the Wall Street Journal reported today. The Monetary Policy Committee kept the benchmark one-week repo rate at 7.5 percent, and left unchanged its interest-rate corridor, ranging from the overnight borrowing rate of 7.25 percent to the 10.75 percent overnight lending rate.

The pressure on Turkey’s lira isn’t likely to ease any time soon, which could mean more pain for one of the most battered emerging-market currencies, the Wall Street Journal reported today. The lira sank to a record low against the dollar yesterday, pressured by domestic political uncertainty, escalating violence and the prospect of a lowered credit-rating outlook on top of the possibility of a U.S. interest-rate increase later this week. The uncertainty isn’t expected to let up before elections slated for November.

Turkey's banking watchdog placed Asya Katilim Bankasi AS under watch and armed regulators with broad powers over the beleaguered Islamic lender, The Wall Street Journal reported. The move brings the bank one step closer to state seizure, as capital outflows and a ratings downgrade exacerbate damages from a political fight embroiling the lender, which has fallen from the largest of Turkey's four Islamic banks in December to third in terms of assets.

As Turkish interest rates spike and the economy slows, local bankers and real estate experts are becoming increasingly worried that Istanbul’s real estate market may be heading for a fall, the International New York Times reported. And they are reminded of similarities between the situation here and what happened in Spain and Ireland, where alliances among banks, developers and politicians contributed to the creation of real estate bubbles that popped once interest rates began to rise, puncturing the overall economies as well.

Turkey's central bank—beset by political instability, tumbling confidence and one of the world's fastest falling currencies—said that it will convene an emergency meeting Tuesday, a move that could test whether once-golden emerging markets can avert a destabilizing crisis, The Wall Street Journal reported. Central bankers in many emerging-market countries are under intense political pressure to keep interest rates low to keep economic growth on track, despite the inflationary effects.

Turkey’s legal morass thickened after a prosecutor said Prime Minister Recep Tayyip Erdogan’s government is obstructing a graft probe by preventing detentions, disobeying court orders and allowing suspects to flee, Bloomberg News reported today. Istanbul Prosecutor Muammer Akkas said yesterday that the investigation he was leading into businessmen and officials for involvement in bribery, rigging tenders, and fraud was stripped from him. Erdogan has said that the probe is a smear campaign orchestrated by his opponents.

Prime Minister Recep Tayyip Erdogan suffered the worst blow in his decade in power when an old friend quit the cabinet and called for his resignation, the Wall Street Journal reported today. The public chastisement came after the premier pushed Environment and Urban Planning Minister Erdogan Bayraktar, who has served alongside Erdogan since the 1990s, and two other ministers to resign Wednesday. Each has a son who has been implicated in the graft investigation.

German do-it-yourself chain Praktiker AG is closing its stores in Turkey and withdrawing from the country after failing to sell the nine stores its operates there, Reuters reported. The company, which is battling to return to profit, said on Monday its Turkish subsidiary filed for managed insolvency proceedings with an Istanbul court earlier in the day. "We cannot afford a persistent loss-maker like Turkey.

Struggling lender Dexia SA said it is in exclusive talks to sell its Turkish Denizbank AS unit to Russia's biggest bank, OAO Sberbank, as the Belgian-French bank continues to sell assets to shore up its balance sheet, The Wall Street Journal reported. No financial information was disclosed, but a person familiar with the talks said a deal could be worth between $3 billion and $4 billion and be "the biggest in Sberbank's history." The details are to be ironed out in the next two weeks, the person added. State-controlled Sberbank is Russia's oldest and largest bank.