3Q12 earnings;
better-than-expected on lower operating expenses
Bank Asya reported 3Q12 TRY50m net profit; better than our TRY43m and TRY45m CNBC-e consensus estimates. Positive surprises were lower than expected costs and non-loan-related provisions, which were partly offset by higher-than-expected net CoR as the balance sheet clean-up continued with faster-than-expected NPL inflows and a rise in NPL coverage.
Strong improvement in pre-provision net operating performance
Loans and deposits grew 4% and 8% q-q, respectively, as expected, while the fully-adjusted NIM improved beyond our forecast at 55bp. With better than expected fees and opex, net operating income before specific and general provisions rose strongly 49% y-y. However, provisions brought ROE down to a mere 9% while the after Basel-II CAR stands at 13.8%.
NPL clean-up and the pick-up in profitability to take time
We reiterate our HOLD rating for Bank Asya as we expect the strong pre-provision profitability to continue being marred by higher provision expenses for a longer period than we initially assumed. Total potential problem loans, while down 9% q-q, still account for 7% of total loans and are likely to continue being recognised as NPLs until mid-2013, providing a downside risk to our 2013 EPS estimate. We think the stock is fairly valued as our DDM-based 12-month target price of TRY2.04 offers a limited 4% upside. Key downside risk to our call is a rapid decline in interest rates pressuring the bank’s margins while the main upside risk is a faster and milder than expected end to the NPL clean-up process.
Bank Asya reported 3Q12 TRY50m net profit; better than our TRY43m and TRY45m CNBC-e consensus estimates. Positive surprises were lower than expected costs and non-loan-related provisions, which were partly offset by higher-than-expected net CoR as the balance sheet clean-up continued with faster-than-expected NPL inflows and a rise in NPL coverage.
Strong improvement in pre-provision net operating performance
Loans and deposits grew 4% and 8% q-q, respectively, as expected, while the fully-adjusted NIM improved beyond our forecast at 55bp. With better than expected fees and opex, net operating income before specific and general provisions rose strongly 49% y-y. However, provisions brought ROE down to a mere 9% while the after Basel-II CAR stands at 13.8%.
NPL clean-up and the pick-up in profitability to take time
We reiterate our HOLD rating for Bank Asya as we expect the strong pre-provision profitability to continue being marred by higher provision expenses for a longer period than we initially assumed. Total potential problem loans, while down 9% q-q, still account for 7% of total loans and are likely to continue being recognised as NPLs until mid-2013, providing a downside risk to our 2013 EPS estimate. We think the stock is fairly valued as our DDM-based 12-month target price of TRY2.04 offers a limited 4% upside. Key downside risk to our call is a rapid decline in interest rates pressuring the bank’s margins while the main upside risk is a faster and milder than expected end to the NPL clean-up process.
Hiç yorum yok:
Yorum Gönder