28 Şubat 2013 Perşembe

SEKERBANK - 4Q12 earnings review: HOLD

Strong core performance due to change in asset mix
Sekerbank reported TRY62.2m bank-only net profit in 4Q12 (+8% q-q and flattish y-y), bringing the FY12 net profit to TRY240m marking 104% y-y growth and yielding 14.7%. We had been expecting TRY68m net profit in 4Q12 (market consensus: TRY62.9m). The difference between our estimate and reported bottom line is from higher other operating income.

Margins and asset quality will be the key points to follow
4Q12 results are encouraging with ROE almost doubling y-y, to 14.7%. The asset mix change towards more profitable segments is likely to diminish the pace of NIM contraction in FY13. As long as asset quality is sustained, which is possible in a higher GDP growth environment, Sekerbank may defend its profitability at 14% ROE in FY13.

Upgrade to HOLD with revised target price of TRY2.02
We transfer coverage and upgrade to HOLD from Reduce. Better asset quality outlook and lower-than-previously-anticipated pressure on NIM are likely to sustain profitability. Given the sharp underperformance against ISE-100 YTD, we upgrade our rating. Our combined GGM and EERM model gives a TRY2.02 target price for Sekerbank.
 
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