TSKB (TSKB TI) - Backed by CPI linkers: Maintain Buy
TSKB reported 4Q18 net income of TRY170m (+2% q-q, +18% y-y), in-line with our forecast (TRY163m) and the RT consensus (TRY168m). Earnings would be 56% q-q higher if adjusted for free provisions (TRY90m) set aside this quarter. Core revenues grew 22% q-q on 6pp upward CPI adjustment, despite contracted loan-to-borrowing spread (-1.5pp q-q) due to lower FX loan yields. The trading line was in the red due to swap-related costs (+30% q-q). Fees grew 5% y-y, while opex went up 24% y-y driven mainly by non-HR expenses. Asset quality deteriorated slightly as NPL ratio ticked up to 2.1% (+8bp q-q). Net total CoR dropped 82bp q-q to 169bp largely on currency impact. NPL coverage rose by 4.1pp q-q to 27.8%. ROE materialized at 15.8% in 4Q, down 1.7pp q-q. Yet, ROE adjusted for free provisions was 22.3%, the highest ROE among the banks in our coverage.
Turkiye Sinai Kalkinma Bankasi is a private development and investment bank. Co. provides its clients with an array of products and services in the corporate banking, investment banking and advisory business lines. Co. serves its corporate clients in investment banking through solution oriented treasury products in addition to corporate finance activities such as mergers, public offerings and bond issuances. Co. mainly operates in investment and corporate banking segments. As of Dec 31 2014, Co. had total assets of TL6.23 billion.
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.
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