TURKISH BANKS - Ziraat’s 2Q sheds light on Halk and Vakif
Ziraat Bank reported strong 2Q19 results, despite a significant trading loss, due to its solid top-line growth (19% q-q) and lower net provisions (-26% q-q). Core revenues increased 19% q-q on wider core spreads and higher securities yields, despite lower fees. These resulted in a q-q increase in NIM. Opex increased more than fee growth y-y. Asset quality deteriorated slightly with a rise in NPL rate (one of the lowest NPL rates in the sector). Provisioning reversals led to a lower cost of risk q-q. RoE rose to 11.8% from 7.8% in 1Q19.
According to the June data published by the Banking Supervisory Board, state-owned banks registered a net income of TRY2,423m in 2Q19. After deducting Ziraat Bank’s net income from this figure, we infer that 2Q net earnings of the other two state-owned banks, Halkbank and VakifBank, should be in line with our estimates of TRY318m and TRY377m, respectively.
Turkiye Halk Bankasi (Halkbank) is a banking and financial services company based in Turkey. Co. offers corporate and commercial banking products and services to a range of customers, from individuals to large corporations. Co.'s operations include: consumer and retail banking, consumer loans, credit and debit cards, deposit and overdraft accounts, payroll services, corporate and commercial banking, budget loans, credit line facilities, cash management, investment banking, brokerage, factoring, leasing and insurance services, and tradesmen/SME banking. As of Dec 31 2011, Co. operates 771 branches and had total assets of TL92,160,657,000.
Turkiye Vakiflar Bankasi (Vakifbank) is a banking and financial services company based in Turkey. Co. offers products and services that cover corporate, commercial, investment and small-scale enterprise banking as well as the retail and private banking sectors. Co. also provides financial leasing, portfolio management, real estate, insurance and factoring services through its financial participations. Co.'s deposit products include time and demand deposits, as well as loans comprise spot loans, foreign currency indexed loans, consumer loans, automobile and housing loans, working capital loans, gold loans, foreign currency loans, eximbank loans, and pre-export loans.
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