WOOD Flash – Garanti: defensive 2021E guidance – risk to the upside
Garanti announced its 2021E targets yesterday afternoon (7 January). We find the bank’s guidance conservative, and we see upside risk in management’s NIM expectations. In our view, the rest of the guidance is fairly in line with our expectations. Our thesis for Garanti remains the same. We calculate the underlying ROE at c.16%, which we see as resilient, even against this backdrop, vs. our 17.5% COE assumption. Garanti is the most popular Turkish bank; however, we believe that it is still valued conservatively by the market, on both an absolute and a relative basis. We rate Garanti a BUY, with a price target (PT) of TRY 12.8/share. Our 2021E multiples are 4.3x P/E and 0.6x P/TBV.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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