TURKISH BANKS - Weekly banking review
In the week of 18th Jan, total loans decreased 1.2% w-w and total deposits slid 1.1% w-w. The annual run rate of TRY loan growth declined to 3.2% from 3.3% a week ago. State banks led the TRY loan growth with an annual rate of 13.4% (13.7% a week ago) vs. 2.3% contraction (-2.2% a week ago) for private banks. NPL ratio went up by 7bp to 3.9%. The LDR materialized at 111% (TRY: 129%, FX: 93%).
At 4.2x 2019E P/E and 0.5x 2019E P/B, Turkish banks in our coverage are currently trading at a 38% discount to their EM peers on P/E and 48% on P/B. We recommend investors to further increase exposure to Isbank and Vakifbank ahead of 4Q18 results. Yesterday we published our earnings preview report for 4Q18.
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