BRSA Banking Sector Data – Apr’23 (Oyak Yatırım)

BRSA Banking Sector Data - Apr’23
Banking industry posted profit of 38.6bnTL (-5% m/m, cumulative +47% y/y) in April. Narrowed core spread on declining loan yields and rising deposit costs coupled with lower securities yield on the back of weakened CPI-linker support explain the monthly decrease in net earnings to a large extent. Besides, this is the first time in a decade that the monthly TL spread (-0.5%) landed on a negative territory.
Some of the highlights are listed below:
• Earnings quality keep dropping after 22YE; in fact, net interest income declined by 19% m/m. Core spread retreated by 43bp on elevated TL deposit costs, while loan rates went further south m/m. As a result, net interest margin dropped by 89bp.
• Commission revenues remained strong posting 119% y/y growth thanks to payment system and asset management fees coupled with strong loan growth. Opex growth, on the other hand, surged by 147% y/y on non-HR expenses, influenced by high inflation.
• Provision expenses, which increased at the end of 2022 due mainly to prudence, went back to normalized levels in April. Net cost of risk remained low in April on declined loan loss provisioning and reversals.
• Return on equity slid to 29% in April from 32% a month ago and 45% a year ago.
If we compare private banks (PB) and state banks (SB), the profit of PB went south by 31% m/m, while the profit of SB contracted by 6%. The divergence between the results stemmed mainly from the difference in asset and liability pricing of the two groups, namely loan/deposit spreads.
• Return on equity 26.9% at PB (Dec’22: 50.3%); 14.7% in SB (Dec’22: 17.2%) compared to April 2022’s respective levels of 30.2% and 40.1%.
Our view: The trend in sector profitability is not promising for 2Q23. We expect earnings quality to weaken on lower linker income and contracting core spread. We expect commission revenues to remain high in 2Q in tandem with opex. Provisioning costs have a potential to remain low in 2Q on the back of intact asset quality and strong collections. We continue to prefer banks that make active pricing on the loan and deposit side and manage asset quality proactively.


Oyak Yatırım Menkul Değerler A.Ş.
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                               Yasal Uyarı
 
 Burada yer alan yatırım bilgi, yorum ve tavsiyeler yatırım danışmanlığı kapsamında değildir.Yatırım danışmanlığı hizmeti ; aracı kurumlar, portföy yönetim şirketleri, mevduat kabul etmeyen bankalar ile müşteri arasında imzalanacak yatırım danışmanlığı sözleşmesi çerçevesinde sunulmaktadır.Burada yer alan yorum ve tavsiyeler, yorum ve tavsiyede bulunanların kişisel görüşlerine dayanmaktadır.Bu görüşler mali durumunuz ile risk ve getiri tercihlerinize uygun olmayabılır.Bu nedenle, sadece burada yer alan bilgilere dayanılarak yatırım kararı verilmesi beklentilerinize uygun sonuçlar doğurmayabilir.