Citigroup has sold its nearly 10 percent stake in Turkey's Akbank for $1.2 billion, the U.S. lender said on Mar.5, its latest disposal of overseas assets to cut costs and boost capital.
New York-based Citi has pared back internationally in recent years, pulling out of retail banking in Turkey and in long-established markets such as Japan.
Citi, which had been the second-largest shareholder in Akbank, said the sale would not have a material impact on its finances. Akbank is Turkey's fourth-largest listed lender by assets.
The U.S. bank did not disclose the buyer. Akbank's top shareholder, industrial conglomerate Sabanci Holdings , said it had waived its right of refusal to the stake, adding Citi's offer had been to a "large number" of potential buyers.
Citi said it remained committed to Turkey, where it aims to increase corporate and commercial lending and employs more than 500 people.
Still, the sale comes at an inopportune time for Turkish banking, as overseas investors worry about increased political interference in the industry.
Ratings agency Standard & Poor's warned on Mar. 4 that regulatory actions against an Islamic lender, Bank Asya, illustrated the "potential for political risk, or the perception of it, to directly or indirectly spill over into the financial system".
Bank Asya, founded by followers of U.S.-based Islamic cleric Fethullah Gulen, is at the heart of a power struggle between Gulen and President Tayyip Erdogan, who accuses the religious leader of attempting to build a "parallel state."
In an attempt to soothe concerns about political intervention in markets and monetary policy, Prime Minister Ahmet Davutoglu and his economic team are meeting investors in New York this week.
Their efforts have so far proved to have little immediate effect, with the lira currency tumbling to another record low, and stocks .XU100 falling nearly 2 percent as investors hammered Akbank and its rivals.
Turkey has also been a tough market for foreign lenders, particularly in retail banking, where competition is stiff and local lenders already offer sophisticated services such as biometric ATMs and instant access to foreign currency accounts.
HSBC said last month Turkey was one of four "problem" businesses that it was giving as little as a year to improve before considering more drastic turnaround measures.
Shares of Akbank were down 4 percent at 1320 GMT, making it the fifth-worst performer on Istanbul's BIST 100 index .XU100.
