We anticipate that the relaxation of the regulatory framework and a return to more conventional policies will positively impact the banking sector. TL commercial loan/deposit spreads (front book), which had plummeted to as low as -18% by the end of June, have reached 6.6%, thanks to the removal of a cap on lending rates and lower deposit rates. Taking these favourable developments and strong 2Q23 results into account, we are raising our aggregate FY23 NI estimate for the sector by 10%. We now fo...
Halkbank’s 3Q22 results are higher than estimates: Halkbank reported bank-only net income of TL4.30bn in 3Q22 (+67% q/q) (RoE: 24.2%), higher than both our TL4.04bn forecast and the consensus estimate (TL4.06bn), thanks to higher-than-expected NIM. As such, net income in 9M22 reached TL8.9bn (20.0% RoE), vs. TL215m in 9M21. We revised our FY22 NI estimate to TL14.0bn from TL21.5bn, factoring in the high provision expenses, and our FY23 NI estimate to TL32.5bn from TL29.5bn, mainly due to greater...
Halkbank’s 2Q22 results are higher than estimates: Halkbank reported bank-only net income of TL2.58bn in 2Q22 (+27% q/q) (RoE: 15.8%), higher than both our TL2.34bn forecast and the consensus estimate (TL2.42bn), thanks to higher-than-expected NIM. As such, net income in 1H22 reached TL4.6bn (16.6% RoE), vs. TL123m in 1H21. We revised our FY22 NI estimate to TL21.5bn from TL14.8bn following the results. Halkbank trades at 2022e P/B of 0.32x and we maintain our HOLD recommendation for the stock w...
We anticipate net earnings growth of 304% for the banks in our coverage in 2022, driven by higher CPI linker income, which translates into an average ROE of 41%. While this level of ROE has not been seen in recent years, we believe it is more accurate to look at the ‘real’ return on equity, rather than the nominal level, considering the high inflation level. We expect CPI to end the year at 57%, and a return below inflation therefore means a contraction in banks’ equity in real terms. While ther...
Halkbank’s 1Q22 results in line with estimates: Halkbank reported bank-only net income of TL2.03bn in 1Q22 (+57% q/q) (RoE: 15.4%), in line with both our TL2.03bn forecast and the consensus estimate (TL1,98bn), as all major operational lines were parallel to our forecasts. Halkbank trades at 2022e P/E of 5.1x and P/B of 0.45x, according to our forecasts and we maintain our HOLD recommendation for the stock. Overall, we expect a neutral market reaction to the company’s 1Q results. TL loan growt...
TURKIYE HALK BANKASI (TR), a company active in the Money Center Banks industry, now shows a lower overall rating. The independent financial analyst theScreener confirms the fundamental rating of 2 out of 4 stars. However, the market behaviour deterioration triggered a risk requalification, which can be thus described as moderately risky. theScreener believes that increased risk justifies the general evaluation downgrade to Neutral. As of the analysis date February 25, 2022, the closing price was...
Halkbank’s 4Q21 results better than estimates: Halkbank reported bank-only net income of TL1,293m in 4Q21 (+154% y/y) (RoE: 12.1%), higher than both our TL1,069m forecast and the consensus estimate (TL1,152m). As such, net income in FY21 reached TL1,508m (3.5% RoE), equating to a 42% y/y decline. The deviation in the bottom line was mainly due to lower-than-expected tax expense. We revised our FY22 NI estimate to TL5.30bn from TL3.97bn as we raise our NIM forecast and lower CoR estimate. With t...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
1Q21 results in line with estimates: Halkbank reported bank-only net income of TL59m in 1Q21 (-88% q/q, -93% y/y) (RoE: 0.6%), in line with both our TL59m forecast and the consensus estimate (TL66m). There was no significant deviation from our forecasts in the operating metrics. While NIM was negative in the quarter, the bank managed to report a positive bottom line with the help of robust provision reversals, which were boosted by restructurings (TL1bn) and reversal of excess provisions (TL1.3b...
Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of Turkiye Halk Bankasi A.S. Global Credit Research- 12 Mar 2021. London, 12 March 2021-- Moody's Investors Service has completed a periodic review of the ratings of Turkiye Halk Bankasi A.S. and other ratings that are associated with the same analytical unit.
4Q20 results in line with estimates: Halkbank reported bank-only net income of TL510m in 4Q20 (+62% q/q, -36% q/q) (RoE: 4.8%), broadly in line with both our TL493m forecast and the consensus estimate (TL492m). As such, net income in FY20 reached TL2.6bn (6.9% RoE), equating to a 51% y/y increase. While NIM were weaker than our expectations, this was offset by lower-than-expected CoR. The management gave low-teens ROE guidance for 2021, which we believe will be hard to achieve as we anticipate 5...
While high provision expenses weighed on the banks’ profitability in 2020, net income in 1H21 will be hit by rising funding costs. Nevertheless, we anticipate a strong improvement in RoEs starting from 2H21, as NIMs normalize. We expect the average RoE of the banks in our coverage to reach 14% in 2H21, and 16% in 2022. Turkish banks are currently trading at 0.47x 21E P/B and 4.4x P/E, implying discounts of 48% and 56%, respectively, compared to MSCI EM banking index; and we think there is room f...
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