By Mauro Orru 
 

UniCredit SpA has agreed to sell its stake in Turkish bank Yapi ve Kredi Bankasi AS to industrial conglomerate KOC Holding AS for a consideration of 300 million euros ($347.6 million), in a deal aimed at bolstering its capital strength.

The Italian bank said late Monday that KOC Holding would buy an 18% stake in Yapi Kredi as part of a share-purchase agreement the conglomerate signed with UniCredit in 2019.

UniCredit said it expects to complete the sale to KOC Holding in the first quarter next year, and sell the remaining 2% of its stake in Yapi Kredi on the market.

The Italian lender said the deal would have an overall low-mid single-digit positive impact on its consolidated common equity Tier 1 ratio, a key benchmark of banking strength.

However, UniCredit said it expects a negative impact of roughly EUR1.6 billion for the year, citing the foreign-exchange revaluation reserve related to its Yapi Kredi stake.

UniCredit recently reported a jump in third-quarter net profit and raised its targets for the year.

 

Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94

 

(END) Dow Jones Newswires

November 09, 2021 01:46 ET (06:46 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.
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