Halkbank - Strong Growth Secures Good Asset Quality, Fee Growth in 2Q17
Halkbank announced its 2Q17 BRSA standalone financials yesterday. Net income totaled TRY1,009 mln, in line with estimates and yielding 17.3% quarterly ROE, a 17% Q-o-Q drop but 14% y-o-y growth. This put the 1H17 net income figure at TRY2,228 mln (up 42% y-o-y). Positive highlights from the quarter include strong asset quality with only 38 bps in net NPL inflow and a significant 5% Q-o-Q drop in Category 2 loans, 10.7% Q-o-Q lira loan growth with even larger 13.4% Q-o-Q growth in lira deposits, 70% y-o-y growth in fees and a circa 50 bp Q-o-Q improvement in capital ratios. On the negative side, we note a 90 bp Q-o-Q drop in NIM due to a 66 bp Q-o-Q contraction in the loan/deposit interest rate spread and a TRY113 mln Q-o-Q drop in interest income from CPI linkers. We expect the financials to be neutral for the bank's share price.Turkiye Halk Bankasi (Halkbank) is a banking and financial services company based in Turkey. Co. offers corporate and commercial banking products and services to a range of customers, from individuals to large corporations. Co.'s operations include: consumer and retail banking, consumer loans, credit and debit cards, deposit and overdraft accounts, payroll services, corporate and commercial banking, budget loans, credit line facilities, cash management, investment banking, brokerage, factoring, leasing and insurance services, and tradesmen/SME banking. As of Dec 31 2011, Co. operates 771 branches and had total assets of TL92,160,657,000.
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