Garanti Bank - Superb 3Q17 Results
Garanti Bank released 3Q17 financials yesterday, posting TRY1,565 mln standalone net income, flat Q-o-Q but up 18% y-o-y and yielding a 16.2% quarterly ROE. Had the bank not allocated TRY230 mln in discretionary provisions and a TRY137 mln provision for a possible fine from a French court, net income would have been much higher. The reported bottom line slightly exceeded the market consensus of TRY1,516 mln and our estimate of TRY1,511 mln thanks to a strong top line. The other main positives of the quarter were very good NIM (up 10 bps Q-o-Q despite adverse market conditions), 21% y-o-y growth in fee income (which covered 61% of operating expenses), strong asset quality (a net NPL inflow of only 32 bps and a nearly 100 bp Q-o-Q expansion of the NPL coverage ratio) and a 65 bp Q-o-Q increase in the capital ratios. Garanti Bank looks set to deliver even stronger results in 4Q17, so we expect the superb 3Q17 figures to have a positive impact on the share price.Turkiye Garanti Bankasi is a private banking group based in Turkey. Co. operates as an integrated financial services group in every segment of the sector including corporate, commercial, SME, payment systems, retail, private and investment banking together with subsidiaries in pension and life insurance, leasing, factoring, brokerage, and asset management. Co. provides a range of financial services to 13 million customers through a distribution network of 994 domestic branches; 6 foreign branches in Cyprus, Luxembourg and Malta; 3 international representative offices in London, Dusseldorf and Shanghai with more than 4,152 ATMs, a Call Center and internet.
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