BRSA Banking Sector Data – Nov'22 (Oyak Yatırım)

BRSA Banking Sector Data - Nov’22
In November, banking industry posted profit of 53.1bnTL (+7% m/m, +475% y/y). In 11M22, net income surged by 417% y/y. High securities income on the back of CPI-linker support and elevated dividend income explain the monthly increase in net earnings to a large extent.
 
Some of the highlights are listed below:
• Net interest income rose by 14% m/m as a result of expanded securities income. Core spread, on the other hand, retreated by 30bps on higher deposit costs, especially on the TL side, while loan rates remained almost stable m/m.
• TL spread contracted by 63bps m/m due to lower loan yields and higher deposit costs. FX spread, on the other hand, soared by 57bp as loan yields went up. All in all, net interest margin hiked by 1.1ppt underpinned by strong CPI-linker yields.
• Commission revenues doubled y/y thanks to payment system and asset management fees coupled with strong loan growth. Opex growth, on the other hand, materialized at 88% y/y influenced by high inflation.
• Provision expenses, which had increased at the end of 3Q due to prudence, rose sequentially in November. Cost of risk inched up by 10bps in November from 163bps a month ago on the back of elevated generic provisioning.
• Return on equity reached to 49.1% in November from 48.4% a month ago and 16.4% a year ago.
If we compare private banks (PB) and state banks (SB), the profit of PB went north by 10% m/m, while the profit of SB contracted by 1%. The divergence between the results stemmed mainly from provisioning expenses as such provisioning costs rose at SBs which pulled down their monthly profitability.
• PB are far better than SB in net interest margin evolution. NIM rose 1.7ppt m/m at PB driven mainly by higher linker yields, while 39bps increase at SB. SB, on the other hand, showed better performance at asset quality management than PB.
• Return on equity 55.6% at PB (Nov’21: 23.7%); 40.4% in SB (Nov’21: nil) compared to October 2022’s respective levels of 53.6% and 43.3%.
 
Our view: The trend in sector profitability is promising for 4Q22. Adjusted numbers indicate 30% q/q rise in net earnings in 4Q vs 3Q. This increase could be 18% at private banks and almost 100% at public banks compared to 3Q. While profitability continues to increase, earnings quality remains high. The FX-protected deposit product continues to take deposit costs under control. CPI-linker yields, on the other hand, keep rising. We expect commission revenues to remain high in 4Q. Yet, linker revenues will be the main factor that will support profitability in 4Q. We continue to prefer banks that make active pricing on the loan and deposit side and manage their margins well.
  

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.