TURKISH BANKS - Weekly banking review
In the week of 8th February, total loans inched up 0.2% w-w, while total deposits went up 0.3% w-w. State banks led the TRY loan growth with an annual rate of 12.6% vs. 6.6% contraction for private banks. NPL ratio remains stable at 4.1%. The LDR materialized at 115%.
The Turkish banking index (XBANK) is down 0.6% this week; however, outperformance continues against the EM and European banks. YTD, XBANK has gained 13.9% outperforming EM and European banks by 7.6% and 12.6%, respectively.
In lira terms, XBANK is flat outperforming the broad market and the manufacturers by 0.5% this week. YTD; banks are outperforming the broad market and the manufacturers by 2.3% and 1.8% respectively.
ISCTR (+5.5%) was the best performer by a wide margin followed by VAKBN (+1.9%); in fact, only ISCTR and VAKBN had positive TRY returns on the week. HALKB (-2.3%) was the worst performer followed by AKBNK (-1.7%).
At 4.2x 2019E P/E and 0.5x P/B, Turkish banks in our coverage are currently trading at a 49% discount to their EM peers on P/E and 52% on P/B. We recommend investors to further increase exposure to Isbank, Garanti and Vakifbank.
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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