Isbank (ISCTR TI) - Stellar EPS performance in 4Q: Maintain Buy
Isbank has announced a 4Q net income of TRY2,196m (+77% q-q, +192% y-y), beating the RT consensus (TRY1,502m) and our estimate (TRY1,517m). Lower-than-expected provisions caused the main deviation from our estimates. Isbank reversed free provisions of TRY350m, adjusting for which q-q earnings would still be up 49%. Core revenues contracted by 14% q-q due to narrowed core spread (285bp), while CPI-linker revenues rose by 37% q-q and fees surge by a peer-topping 39% y-y. Cost control was amazingly good as opex contracted 8% y-y, vs 22% expansion for peers. ROE surged 7.4pp q-q to an eye-catching 18.2%, the highest among peers. Even adjusted for provisioning reversal, ROE was high at 15.3%. Among private peers, Isbank could be the only bank to distribute dividends this year. We factored in a 20% payout ratio.
Turkiye Is Bankasi is a commercial banking group based in Turkey Co. is engaged in the provision of private, retail, commercial and corporate banking, money market and securities market operations as well as international banking services. Co. provides services to corporations, SMEs and other trading companies (excluding real trading persons) within the course of its corporate and commercial operations. Co. is organized into two main business segments: Banking segment, which includes corporate, retail and private banking, as well as treasury; and non-banking operations, which are followed according to insurance, ‘investment and finance' and ‘manufacturing and trading' segments.
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