BRSA Banking Sector Data (Oyak Yatırım)

BRSA Banking Sector Data - Feb'23
Banking industry posted profit of 26.2bnTL (-33% m/m, +39% y/y) in February. Contracting core spread on declining loan yields and rising deposit costs coupled with lower securities income on the back of weakened CPI-linker support explain the monthly decrease in net earnings to a large extent.
 
Some of the highlights are listed below:
 
o Earnings quality dropped significantly post 22YE; in fact, net interest income declined by 18% m/m. Core spread retreated by 1.1ppt on elevated TL deposit costs, while loan rates went further south m/m. As a result, net interest margin dropped by 54bp.
o Commission revenues remained strong posting 107% y/y growth thanks to payment system and asset management fees coupled with strong loan growth. Opex growth, on the other hand, surged by 201% y/y on non-HR expenses, influenced by high inflation.
o Provision expenses, which increased at the end of 2022 due mainly to prudence, went back to normalized levels in February. Net cost of risk remained at negative territory in February on declined loan loss provisioning and reversals.
o Return on equity slid to 21.7% in February from 33.4% a month ago and 29.2% 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 37%. The divergence between the results stemmed mainly from the difference in asset and liability pricing of the two groups.
o Return on equity 26.9% at PB (Dec'22: 50.3%); 9.9% in SB (Dec'22: 17.2%) compared to February 2022's respective levels of 30.2% and 21.8%.
 
Our view: The trend in sector profitability is not promising for 1Q23. We expect earnings quality to weaken on lower linker income and contracting core spread. We expect commission revenues to remain high in 1Q in tandem with opex. Provisioning costs have a potential to normalize in 1Q after 22YE 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.