Browsing: Sector Reports

Sector Reports
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Public Banks: One More Leak to Plug

To date we have posted two articles specifically focused on differentiates between public and private banks. As they have been in many developing economies ─particularly in India─, banks controlled by the government are milked to the bone with being forced to provide lending to sustain…

Sector Reports
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Turkish Banks: A Deceleration in Earnings

We have been closely monitoring the banking sector in Turkey as the industry is usually at the focal point for investors looking at the country. Previously we analyzed the declining earnings in the industry and our finding suggested that the monetary policy framework causing higher…

Sector Reports
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Non-Financial Sector Debt: Impending Risks

Previously we noted that Turkey debt will draw attention as global monetary conditions were set to be less friendly to developing economies than it had been in the past. Following the Trump win, we have seen a bond rout in the United States, resulting in…

Macro View
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Loan Growth: Where do the Expenses Come From?

Turkey is set to post one of the weakest GDP growth readings in Q3 since the global financial crisis. In a previous post, we mentioned that the quarter ended September may not mark the beginning of a period of low growth with tepid economic performance.…

Business Reports
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Turkey: Brokerage Industry Trends

Turkey’s brokerages faced sharp trading falls in a tough climate last year of which 30% reported losses during the first half. That said, we had seen some downsizing-related layoffs as well as some international investment banks simply quitting the business. While this was partly due…

Equities
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Turkish Industrials: Buying Opportunities

In a recent note, we mentioned that now may be the moment to get in on value in Turkish stocks, particularly in industrial stocks. Following that, Borsa Istanbul Industrials Index (BIST:XUSIN) has bounced back 4.5% in two trading days, beating the banks, but currently see…

Equities
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Turkish Financials: Latest Results & Outlook

Turkish banks have outperformed its EM peers on a ytd basis (see the chart below), as MSCI EM Financials index took a huge hit in the first two weeks of this year arising out of a massive sell-out in Chinese markets. Excluding that timeframe, the…

Sector Reports
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Turkish Banks: What Went Wrong?

Turkish banks which have spent years with high profits generated in the past, only managed a ROE of 10.6% (10-year average was 16.1%), well below the business’ cost of capital of at least 15% and the returns which investors aspire. Unlike their peers around the…

Sector Reports
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Turkish Banks: Funding Challenges Ahead

Time and time again, we concerned ourselves with volume growth trends in Turkish banking spectrum. As is the case with any emerging market, credit growth in Turkey has been phenomenal since interest rates cut to near zero in developed economies. That being said, deposit growth…

Sector Reports
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Turkish Banks: 4Q 2015 Earnings Preview

Turkish banks are up 3.5% on average year-to-date with tailwinds from a better outlook for 2016 and easing regulation standards. However, since last year, Turkish banks have performed remarkable worse in a MENA context. The “exciting” period regarding the political risks and the continuation of…

Sector Reports
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Do Turkish Banks Add Economic Value?

Time and time again I have been directing sharp criticism for the relatively poor financial performance, and more importantly, for the industry’s lack of focus on low profitability. In September, return on equity, or ROE, for the whole industry, came down to a level that…

Sector Reports
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Prospects of A Liquidity Shortfall

In a country where average maturity of deposits is very short, liquidity risk management for financial instructions is of paramount importance. Most particularly, in Turkey, a country seeking high growth where the consumption is the engine of the economy, the liquidity balance become even more…

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