HALISTER1: Turkey’s State Banks Offer Better Value, HSBC Says

Turkey’s State Banks Offer Better Value, HSBC Says

(Bloomberg) -- HSBC raises 2017-2019 earnings forecasts for Turkish banks and is most upbeat on state banks as it says public lenders showed the best growth momentum, analysts including Andrzej Nowaczek say in report.
  • Says growth momentum for public lenders "sustainable"
    • Cites state banks’ relatively low loan-to-deposit ratio, fee income share in assets implying more upside and expectation that public sector deposits rate cuts will stay
  • Raises 2017 earnings forecasts by 17% on average
  • Expects net interest margins in 2Q to decline slightly, though sees banks increasing flat NIM guidance next quarter due to 55bps jump in 1Q
  • Says recent advance in credit activity is not sustainable
    • Sees loan growth 20% this year and fall 11% in 2018
  • Upgrades Vakifbank to buy vs hold, PT 7.20 liras vs 5 liras
To contact the reporter on this story: Tugce Ozsoy in Istanbul at tozsoy1@bloomberg.net

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
AKBNK TI (Akbank TAS)
GARAN TI (Turkiye Garanti Bankasi AS)
HALKB TI (Turkiye Halk Bankasi AS)
ISCTR TI (Turkiye Is Bankasi)
VAKBN TI (Turkiye Vakiflar Bankasi TAO)

People
Andrzej Nowaczek (HSBC Securities Asia Ltd)

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