Akbank (AKBNK TI) - Deleveraging ends; spreads recover: Upgrading to Buy
Akbank posted a 1Q19 net income of TRY1,413m, in line with our estimate (TRY1,412m) and the RT cons (TRY1,352m). Despite a 10% q-q drop in core revenues due to lower linker yields, retreated swap costs and high collections were supportive of earnings. Core spread widened by 1.4ppt q-q (BNPPe: 1.5ppt) on eased deposits costs and stable loan yields. Fees grew by an eye-catching 52% y-y on strong commercial lending vs a 23% increase in opex. Net total CoR slid to 225bp from 287bp in 4Q, while NPL coverage stayed flat at 58%. ROE rose to 12.4% from 9.7% in 4Q; adjusted for free provisions (TRY100m), it would be 13.2%.
We made slight upward revisions in our FY19-21E EPS and upgrade to BUY on recovering operational performance.
Akbank is a commercial bank. Co. operates in five segments: Retail banking offers a range of retail services, such as deposit accounts, loans, credit cards, insurance products and asset management services; Corporate and Small and Medium Size Enterprises banking provides financial solutions and banking services; Treasury Activities conducts regional and foreign currency spot and forward transactions, bonds and other domestic securities; Private banking offers banking and investment transactions for upper-income groups and the International banking provides services for foreign trade financing and Turkish Lira clearances, and money transfers through agent financial institutions.
TEB Investment equity research analysts and strategist team consists of 8 analysts with an average finance sector experience of 15 years and special focus on international investors.
With our 6 equity research analysts we cover 93 companies across 21 sectors, reflecting 80% of the total market capitalization of all BIST companies and 86% of the BIST100 companies. Our strategy team provides in depth top-down and bottom-up market views with insight on FX and bond markets by publishing sectoral and strategic reports both in English and Turkish.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.