TURKISH BANKS - Weekly banking review
In the week to 27th July, total loans increased 0.6% w-w, while total deposits grew 1.2% w-w. After June-end, TRY deposit volume kept increasing as rising TRY deposit rates attracted more depositors, while TRY loan growth appeared relatively muted. The annual run rate of TRY loan growth was realized at 16.7%. State banks led the TRY loan growth with an annual rate of 22.7% vs. 12.7% for private banks. On top of that, the LDR remains high at 116% while the NPL ratio remained flat at 3% with 71% coverage. The Turkish banking index (XBANK) is down 6.4% this week - bringing monthly losses to 24.2%. Please note that EM EMEA banks gained 0.5% this week. In lira terms, XBANK is down 2.8% and underperforming the market for the 37th out of the last 56 weeks. BIST Banks / BIST Manufacturers ratio (XBANK / XUSIN) closed yesterday at the lowest print since 1997 February after the top weight in the manufacturing index, Eregli Demir ve Celik’s (EREGL.TI) 6.7% upmove this week (last: 0.94x) On a 2018E P/E of 3.5x and P/B of 0.6x, Turkish banks we cover are trading at 55% and 42% discounts to EM peers, respectively. We have BUYs on Akbank, Garanti, Vakifbank and TSKB.
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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