TURKISH BANKS - Weekly banking review
In the week to 26th October, total loans decreased 0.1% w-w while total deposits grew 0.5% w-w. The annual run rate of TRY loan growth declined to 9.3% from 10% a week ago. State banks led the TRY loan growth with an annual rate of 16.9% vs 5.1% for private banks. The LDR remained flat at 114% while the NPL ratio materialized at 3.4% with 69% coverage.
QTD, the Turkish banking index has outperformed EM and EMEA banks and in TRY terms it has outperformed the manufacturers and the broader market.
Note that the critical BIST Banks / BIST Manufacturers ratio (XBANK / XUSIN) closed at 1.00x for the first time since early July.
On a 2019E P/E of 2.9x and P/B of 0.4x, Turkish banks we cover are trading at 61% and 60% discounts to their 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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