TURKISH BANKS - Weekly banking review
In the week upto 10th Aug, total Turkey loans increased 7.5% w-w while total deposits grew 9.7% w-w. The lira lost 21% against USD between 10th and 13th August, which explains the growth in total loans and deposits. The annual run rate of TRY loan growth declined to 15.8% from 16.2% a week ago. State banks led the TRY loan growth with an annual rate of 22.2% (flat w-w) vs. 12.1% (flat w-w) for private banks. On top of that, the LDR went down to 115% (138% for TRY and 95% for FX) from 117% a week ago, while the NPL ratio remained flat at 2.8% with 71% coverage.
Turkish banking index (XBANK) is down 24.3% this week bringing the QTD sell-off to 44.1%. EM banks are down only 1.2% this quarter. In lira terms, Turkey’s Banking index (XBANK) is down 19.3% and underperformed the market for the 38th week out of the last 58. BIST Banks / BIST Manufacturers ratio (XBANK / XUSIN) closed at all-time lows as manufacturers outperformed banks by 13.7% this week with the sell-off in ISCTR (-22.4%) and AKBNK (-21.1%).
On a 2018E P/E of 2.9x and P/B of 0.4x Turkish banks we cover are trading at 65% and 68% 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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