VAKIFBANK 4Q18 Update - Rough quarter behind, trading at a peer-low P/E
VAKBN – IN LINE .. TL1,044m NI in 4Q18 was in-line w/cons of TL1,012m. Weaker-than-expected margins and slightly higher operating expenses were offset by very strong fee income and lower-than-expected provisions. The latter was due to lower coverage because of both ageing and IFRS-9. VAKBN has prudently set aside TL530mn of free provisions, which raised total provisions as a % of loans to a decent 5.4% in 4Q18, from 4.7% in 3Q18. VAKBN reported ROE stood at 15% in 4Q18 and a peer-high 16% in FY18. At the consensus estimates, VAKBN trades at a peer-low 2019E P/E and at a higher than historical average 28% discount, despite having delivered the strongest ROE in 2018 and also guiding for the strongest one in 2019. Vakifbank remains as one of our top picks among Turkish banks, as we maintain our BUY rating with a 12M TP of 5.46/share.Turkiye Vakiflar Bankasi (Vakifbank) is a banking and financial services company based in Turkey. Co. offers products and services that cover corporate, commercial, investment and small-scale enterprise banking as well as the retail and private banking sectors. Co. also provides financial leasing, portfolio management, real estate, insurance and factoring services through its financial participations. Co.'s deposit products include time and demand deposits, as well as loans comprise spot loans, foreign currency indexed loans, consumer loans, automobile and housing loans, working capital loans, gold loans, foreign currency loans, eximbank loans, and pre-export loans.
BGC has been one of the major market players in Turkish OTC debt, FX and swaps markets since 1998.
We started offering corporate finance and investment banking services to our clients in 2013. We offer a complete range of financial services to help our clients achieve their goals. Our main areas of activity within investment banking are as follows:
- Mergers & Acquisitions
- Equity Capital Markets
- Debt Finance & Advisory
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