WOOD Flash – Garanti Bank: 2019 targets highlights
Garanti announced its 2019 budget yesterday (9 January). The main tenets of the bank’s 2019 budget are very similar to Akbank, as expected: Garanti is planning keep the NIM contraction at 30-40bps and the COR less than 300bps. The bank is rather sceptical on the volumes outlook, with only 5% growth expectation in TRY loans and as much as a 10% contraction in FX loans. The 2019E ROE is foreseen as in the low-teens. In general, we find the numbers and tone on 2019E as in line with the market’s preliminary expectations. Management also highlighted that the bank may opt not to distribute dividends from the 2018E net income. We do not expect a market reaction to the 2019 targets. We rate Garanti a BUY, with a TRY 10.4/share price target (PT). The stock is trading at 4.9x P/E and 0.7x P/TBV for 2018E, on our estimates.Turkiye Garanti Bankasi is a private banking group based in Turkey. Co. operates as an integrated financial services group in every segment of the sector including corporate, commercial, SME, payment systems, retail, private and investment banking together with subsidiaries in pension and life insurance, leasing, factoring, brokerage, and asset management. Co. provides a range of financial services to 13 million customers through a distribution network of 994 domestic branches; 6 foreign branches in Cyprus, Luxembourg and Malta; 3 international representative offices in London, Dusseldorf and Shanghai with more than 4,152 ATMs, a Call Center and internet.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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