Israel’s Bank Hapoalim Seeking Turkey Pullout

Bank Hapoalim, one of Israel’s largest lenders, is planning to pull out of its investment in Turkey’s Bank Pozitif, according to Reuters.

It is the second time Bank Hapoalim has attempted to sell its 70 percent stake in the Turkish bank. A previous effort failed four years ago when talks with the potential buyer broke down.

“The bank is examining possibilities for the sale of its full holdings in Bank Pozitif, further to the bank’s strategic plan, in which a decision was made to gradually reduce the credit portfolio at Bank Pozitif,” a spokeswoman for the Israeli bank told Reuters.

Foreign banks rushed to buy stakes in Turkish counterparts between a financial crisis in Turkey in 2001 and the global meltdown of 2008. Several have since sold their stakes as they sought capital to fund other operations. A severe economic downturn in Turkey, which began in the first half of last year and intensified due to a currency crisis, is leading to significant deterioration in the credit quality of Turkey’s banking industry.

Hapoalim is meeting financial advisers for the sale and will hire one soon, Reuters said citing unnamed sources with knowledge of the matter.

Relations between Israel and Turkey, traditionally strong in the pre-Erdoğan era, have also soured as the Turkish president led criticism of Israel’s treatment of Palestinians and gave support to Hamas.