Bank of America analyzes Turkish banks: Target prices raised

Bank of America (BofA) has re-evaluated its target prices and recommendations for 6 Turkish banks. In a note signed by the bank's Research Analyst David Taranto, it was stated that Turkish banks are in the early stages of a new asset quality cycle. While it was noted that high non-performing loans could be a factor for the sector in the future, it was also mentioned that this situation is not necessarily negative for the sector.

While it was stated that asset quality is a matter related to profitability, it was said that this is not a fundamental problem and does not have a feature that suppresses liquidity. The note emphasized that non-performing loans for retail customers are a critical issue, while the corporate side remains more robust for now.

The note stated that banks have three important revenue engines. These were defined as net interest income, fees, and transactions.

Here are the new assessments from the US giant regarding the banks:

The target price for Akbank was raised from 85 TL to 88 TL; its recommendation was maintained as "buy".

The target price for Garanti BBVA was raised from 160 TL to 166 TL; its recommendation was maintained as "buy".

The target price for Yapı Kredi Bankası was raised from 42 TL to 43.5 TL; its recommendation was maintained as "buy".

The target price for İş Bankası C was raised from 20 TL to 20.6 TL; its recommendation was maintained as "buy".

The target price for Halkbank was raised from 15 TL to 15.4 TL; its recommendation was maintained as "underperform".

The target price for VakıfBank was raised from 22.7 TL to 23.8 TL; its recommendation was maintained as "underperform".