Page 42 - TURKRptFeb20

8.1.7 Banks news
Yapi Kredi said on January 27 it has been fined TRY187.1mn ($31.6mn) by the Treasury Ministry for violating an insurance law. Two days previously peer Akbank announced it received a similar penalty.
Earlier in the month, the competition authority officials turned up unannounced at banks to inspect computer data that it was conducting “preliminary research”.
Akbank said it was fined TRY94.7mn. A suspension of its insurance brokerage for 15 days to mid-February was also imposed. The bank said the punishment would not have any “material impact” on its financial statements.
The law the banks violated prohibits sharing false information on companies’ services, actions that can harm clients and delaying compensation payments, among other things.
Both banks said they were using a 25% advance discount to pay the fines.
Turkey’s six largest lenders are set to report their first quarterly profit gains after three straight quarters of declines, according to the median estimate of 15 analysts surveyed by Bloomberg. Their earnings per share growth in 2020 will probably outpace those of peers in emerging markets from Russia to South Africa, the data also show.
“Widening net-interest margins, a rebound in credit demand and lower provisions are behind the strong momentum,” Bloomberg Intelligence analyst Tomasz Noetzel noted. There are risks and the extent of recovery “will rest on domestic politics and geopolitical tensions, with unpredictable policy making still a major driver of sentiment”.
The turnaround comes following aggressive rate-cutting from the central bank that have driven the benchmark to below inflation. The regulator also brought in other incentives to get credit flowing after a lending contraction during the early part of 2019, especially with loans in foreign currencies.
Consumer borrowing leapt 10% in the fourth quarter. Commercial debt rose 4%, according to data compiled by Turkey’s banking watchdog.
The 12-member Borsa Istanbul Banks Sector Index has rallied 14% this year.
Lira-denominated loan growth is expected to increase more than 15% this year at the country’s three largest private banks, Turkiye Garanti Bankasi, Akbank and Turkiye Is Bankasi, the survey forecasts show. The non-performing loans ratio is also expected to stabilise.
Garanti launched the Q4 financials season on January 30, Akbank followed on January 31 and Isbank is awaited in the first week of February .
“Halkbank, Vakifbank, and Isbank’s results will stand out positively with a substantial quarter-on-quarter earnings increases,” according to Cagdas Dogan, a banking analyst at BGC Partners in Istanbul.
It is expected that the gains will be driven by a strong net interest margin expansion and relatively lower cost of risk levels. Isbank, however, will see profit gains particularly due to lower coverage ratios.
“Yapi Kredi will stand out negatively,” Dogan said, because of “a significant NPL clean-up and provisioning boost” although its other key metrics will be in-line with most of its peers.
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