ISTANBUL, Oct 3 (Reuters) - Turkey's Treasury is taking a controlling stake in the country's seventh largest bank by assets, Vakifbank , which is expected to lead to a possible secondary offering at a later stage, its CEO said on Wednesday.
Vakifbank Chief Executive Suleyman Kalkan said the Treasury will acquire a 58.51 percent stake in the bank, currently controlled by General Directorate of Foundations.
Vakifbank was partially privatised in 2005 and 25.2 percent of shares are free float, while 16.1 percent of shares belong to the Vakifbank Pension Fund and the remaining 0.19 percent of shares are held by other foundations and shareholders.
The shares owned by the bank's pension fund may also be transferred to the Treasury if the general assembly decides, Kalkan said.
Turkish banks have attracted overseas interest thanks to their strong capital bases and growing profits, said ratings agency Fitch in a note in September.
Russia's Sberbank bought Turkey's DenizBank
for up to 3.09 billion euros ($4.00 billion) in June, while Spain's Banco Bilbao Vizcaya and France's BNP Paribas have made investments over the past two years.
"The level of international investor interest in Turkey's banks means bank privatisations are once more on the agenda," Fitch Ratings said in the note.
Vakifbank had a market value at $5.53 billion as of the close of trading on Oct. 2.
"Our aim is to become the 4th (largest) bank in Turkey. Therefore the uncertainties regarding ownership should be resolved," Kalkan told journalists at a news conference.
"We expect this process to be completed by year-end but special legislation regarding the transfer process must be enacted first. In time raising the publicly traded proportion could come into question," he said.
Vakifbank shares were down 0.1 percent at 3.86 lira by 1230 GMT.
"The transfer of Vakif ownership is ostensibly so that the foundation that presently owns around 58 percent of the bank can
realise some funds to help it manage a portfolio of real estate assets with significant historical and commercial value in light of reduced income from bank dividends," it said, adding that the transfer of shares to the government would also facilitate a
share offering at a later date.
($1 = 0.7731 euros)
(Reporting by Ebru Tuncay, writing by Seda Sezer; Editing by Louise Heavens)