Acquisition

Commercial Bank completes majority stake acquisition in Alternatifbank in Turkey

24 July 2013, Doha, Qatar: Commercial Bank of Qatar ("Commercial Bank" or "the Bank"), a leading Qatari based international banking group, today announced the completion of its acquisition of a 70.84% shareholding in Alternatifbank A.S. ("ABank") in Turkey from Anadolu Endustri Holding A.S. ("Anadolu"). The completion follows regulatory approval from the regulators in Qatar and Turkey. Commercial Bank announced its intention to acquire a majority stake in ABank in March 2013. As part of the transaction, Commercial Bank will launch a mandatory tender offer to acquire the 4.16% of ABank's shares that remain in the public domain. Details of the tender offer will be announced in due course.

The transaction is based on two times book value at 30 June 2013, and expands Commercial Bank's international footprint to four regional markets. Anadolu will retain a 25% stake in ABank, in addition to board representation.

ABank, a commercial bank focusing on small and mid-size enterprises (SMEs), is a mid-sized lender in Turkey with assets of TL 7.9 billion ($4.4 billion) at the end of 2012. It provides a suitable entry point for Commercial Bank into a key strategic market with strong growth prospects and a fast-expanding banking sector.

The acquisition is an important step in Commercial Bank's strategy to expand its footprint in retail and corporate banking outside the Gulf Cooperation Council (GCC) region. The Bank's international expansion strategy has focused, to date, on countries within the GCC. In 2005 the Bank successfully acquired minority stakes in National Bank of Oman (34.9%) and in 2008 in United Arab Bank (40%) in the UAE, and has forged successful alliances with these banks.

This milestone deal represents one of Commercial Bank's biggest investments, its first investment in Turkey and its first acquisition of a majority stake in another bank.

His Excellency, Abdullah Bin Khalifa Al Attiyah, Chairman of Commercial Bank, commented: "We are delighted to have received regulatory approval for, and now completed, this very important transaction for Commercial Bank. As the trade and economic links between the GCC countries and Turkey grow ever stronger, and corporates become more active in their cross border activities between the two markets, we feel the timing for our entry into the Turkish market is right. ABank is a highly respected, growing bank and we are looking forward to welcoming the bank into the group to facilitate further growth for all of our alliance banks."

ABank was established in 1991 and is now the country's seventeenth biggest lender by assets with 69 branches in 25 cities across Turkey. At 31 December 2012, total loans stood at TL 5.1 million, with customer deposits of TL 4.2 million and shareholders' equity of TL 601 million. The bank posted a net profit after tax of TL 81 million, up 290% from the prior year..

Turkey is the eighteenth biggest economy in the world and has enjoyed an average annual GDP growth rate of over 5% since 2002. Turkey and the Middle East have an increasingly close financial and economic relationship, with the Middle East and the Caucasus accounting for 28% of Turkey's exports, twice the level of five years ago. Exports from Turkey to Arab countries increased 11-fold in the last decade and imports from Arab countries grew 12-fold. The level of bilateral trade was nearly USD 50 billion in 2012. Turkish investment in the MENA region has grown from approximately USD 5 billion to more than USD 34 billion in just under a decade. The country saw GDP growth of 2.2% in 2012. The banking sector, which has seen loan growth of 142% since 2008, remains relatively under penetrated compared with the Eurozone. It is expected to continue to grow on the back of continued GDP expansion.

Mr. Hussain Alfardan, Commercial Bank's Managing Director, said: "The management team from each of our four alliance banks have started to work together to ensure that our customers in each country, as well as our shareholders, see the benefits of our growing regional presence. Combining ABank's extensive knowledge of the Turkish market with our existing operations in Qatar, the UAE and Oman will reiterate our position as one of the leading commercial banks in the region, and will also ensure we deliver the best results for all our stakeholders."

Mr. Andrew Stevens, Group Chief Executive Officer of Commercial Bank, said: "We see the ABank acquisition as a very exciting opportunity for the whole Commercial Bank alliance of our customers, shareholders, employees and our other stakeholders in each market. We're aiming to deliver multiple revenue synergies from the development and cross sales of innovative products and services across the group, and we will be seeing cost synergies resulting from enhanced processes and systems for our alliance members. I'm very excited and optimistic about our alliance, and I look forward to capturing the opportunities it offers."

**Ends**

For more information, please contact:

Qatari media International media

Mona Abdallah Neil Doyle

Head of Corporate Communications FTI Consulting

Commercial Bank Tel: +44 20 7269 7237 or +44 777 1978 220

Tel: +974 4449 0169 Email: [email protected]

Email: [email protected]

Notes to Editors

About Commercial Bank

Commercial Bank has total assets of QAR 85.6 billion as at 31 March 2013. As a full service commercial bank, the Bank offers a full range of corporate, retail and investment banking services as well as owning and operating exclusive Diners Club franchises in Qatar and Oman. The Bank's countrywide network includes 28 full service branches and 165 ATMs.

Profitable every year since incorporation in 1975, continual investment in technology and human capital, together with a strong capital base, provides a solid foundation for continued growth. A successful diversification strategy has expanded Commercial Bank's GCC footprint through strategic partnerships with associated banks, the National Bank of Oman (NBO) in Oman and United Arab Bank (UAB) in the UAE. NBO, the second largest bank in Oman with total assets of OMR 2.7 billion as at 31 March 2013, has 66 branches in Oman and 1 branch each in Egypt and in Abu Dhabi. UAB is headquartered in Sharjah, with total assets of AED 17.0 billion as at 31 March 2013, and operates 18 branches across the emirates in the UAE.

Commercial Bank enjoys strong credit ratings of (A) from Fitch, (A1) from Moody's and (A-) from Standard & Poor's. The Bank is listed on the Qatar Exchange and was the first Qatari bank to list its Global Depository Receipts (GDRs) as well as bonds on the London Stock Exchange. Additionally, Commercial Bank's Swiss Franc bond issuance in December 2010, listed on the SIX Swiss Exchange, was the first public bond issuance by a Qatari bank in Switzerland.

The Bank is dedicated to supporting Qatar's community and social infrastructure through Corporate Social Responsibility programmes and sponsorship of various events. Title sponsorship of the Commercial Bank Qatar Masters and the Grand Prix of Qatar Moto GP reflects the Bank's promotion of excellence in sports and its keen interest in enhancing Qatar's international sporting reputation. To reinforce Qatar's flourishing cultural environment, Commercial Bank is the strategic partner of the Katara Cultural Village. This collaboration symbolises the Bank's commitment to supporting cultural activities in Qatar and making the country a regional arts and cultural hub.

www.cbq.qa

About ABank

ABank was established in 1991. Commercial Bank became a majority shareholder in ABank in 2013 following the acquisition of 70.84% of ABank's shares from Anadolu Group. Anadolu Group remains a significant shareholder.

ABank is a mid-size Turkish bank that predominately serves medium-sized companies through a country-wide network of 69 branches in 25 cities (as of 30 June 2013). ABank provides commercial/corporate banking services and products, with a special focus on the growing segment of Small and Medium-Sized Enterprises. The Bank's main product ranges cover trade finance instruments, working capital finance, cash management, and portfolio management. The Bank has also recently made a strategic decision to re-enter Retail Banking, targeting "mass affluent segment" in terms of customer profile with tailor made products. 

At the end of December 2012, ABank had total assets of TL 7.9 billion ($ 4.4 billion), total loans stood at TL 5.1 million, customer deposits of TL 4.2 million and shareholders' equity of TL 601 million.

http://wwweng.abank.com.tr/