Apr 19 2019

Ankara looks for way out of Denizbank sale to UAE

When Dubai’s Emirates NBD agreed on the $3.2 billion purchase of Turkey’s Denizbank from its Russian majority owners, Sberbank, it was viewed with great surprise by observers of these countries.

The deal is yet to be confirmed by the authorities in Turkey almost a year since it was announced by Emirates NBD in early April, when it was sold at a knock-down price after the lira tumbled.

This has been interpreted as a sign of Ankara’s unease at the deal, which could give the United Arab Emirates access to very detailed information on Turkey’s economy as well as a foothold in its financial system.

A month before the sale, UAE Foreign Minister Abdullah bin Zayed el Nahyan spoke during a visit to Cairo of an Arab world led by the UAE, Egypt and Saudi Arabia and the challenges posed to it by Iran, Israel and Turkey. Nahyan called responding to these challenges a “historic responsibility” for the Arab states.

Fehim Taştekin, a journalist specialising in the Middle East region, said the true source of the rift between Turkey and the UAE is Ankara’s policies supporting the Muslim Brotherhood, the political Islamist group that is outlawed in many Arab states, including Egypt, Saudi Arabia and the UAE.

This was also the motivation behind the blockade on Qatar by those same countries and Bahrain in 2017, Taştekin said, since the Gulf state is known as a safe haven for Muslim Brotherhood figures.

The blockade could have spelled disaster since it completely cut off land routes to the state, but the Qatari government escaped the worst effects thanks to support from Turkey.

Despite the political disagreements separating Ankara and the UAE, the Denizbank sale gained official approval due to the efforts of the bank’s CEO, Hakan Ateş.

Ateş secured the greenlight after organising meetings in Ankara with President Recep Tayyip Erdoğan, the prime minister at the time, Binali Yıldırım, and other top-level bureaucrats, Reuters reported.

Erdoğan’s assent came as a surprise for many, given Turkey’s ongoing diplomatic crisis with the UAE, and the sale raised warning signs for some who said it could create problems for the Turkish government.

On the day the deal was announced, Reuters reported in a story based on statements from four different sources that it had “met resistance” from Erdoğan due to the diplomatic tensions with the UAE.

However, the involvement of Russians in the deal could leave Erdoğan’s hands tied. The Russian bank is determined to take the money from the sale and leave the Turkish market, and any resistance from Turkey’s president could cause problems with his Russian counterpart, Vladimir Putin. Since Ankara’s Syria policy has made it dependant on Moscow, any move that causes a disagreement with Russia’s largest bank could have serious repercussions.

Though the initial permission for the sale of Denizbank was granted, it has still not received the authorisation required to turn it over to the UAE bank. Rumours are widespread that Erdoğan’s government is searching for ways to prevent the sale from being completed without angering Moscow.

Thursday’s news that two spies, Palestinian nationals Samer Samıh Shabaan and Zaki Yousef Hassan had been arrested allegedly working for UAE in Turkey could therefore be a golden opportunity for Ankara to create a pretext to stop the deal, if the situation was not manufactured exactly for that purpose. It would allow Erdoğan to justify cancelling the bank deal to Putin by pointing to the UAE’s espionage activities.

It is an open secret that Ankara uses its security forces to create situations that serve as pretexts for its political decisions, and this reported espionage could be the latest incident in the long-running conflicts with the UAE stretching from the Muslim Brotherhood to Denizbank. The results are not likely to please Moscow.