ISCTR 2Q12 results and TSKB 2Q12 results

ISCTR 2Q12 results today (HOLD, TP TRY3.90)

Cons NI: TRY822m, TEB-BNPP: TRY905m

We expect Isbank to gain some market share in loans and FX deposits in 2Q12 while maintaining market share in TRY deposits. We forecast the bank will achieve a better loan-deposit spread evolution than peers thanks to well-under-control deposit costs. This should result in about 20bp margin expansion. We also forecast the bank will continue delivering better fee growth (even when we adjust for the impact of accrual accounting) and opex control than peers on y-y comparisons, but opex will rise sharply q-q due to bonus payments. This should be more than offset by about TRY255m higher dividend income on a q-q basis, which we estimate will result in the second best q-q increase in net income among our coverage banks for an ROAE of 19%.

TSKB 2Q12 results today (BUY, TP TRY1.98)

Cons NI: TRY85m, TEB-BNPP: TRY79m

We expect little loan growth from TSKB in 2Q12 following the strong rise in 1Q, as prices were too high hampering demand and the bank behaved conservatively. There were no NPL problems as usual. While we estimate a slight margin contraction from our numbers due to the increased number of the CBT’s extraordinary days, management guides for further margin expansion for the quarter. With little changes in the rest of the P&L items on a q-q comparison, with the exception of doubling dividend income, we forecast another strong quarter for the bank and a solid 22% ROAE.