Goldman Sachs announces the date the Central Bank will cut interest rates!

Goldman Sachs has projected that the Central Bank of the Republic of Turkey (CBRT) will keep its policy rate at 50 percent for the remainder of this year.

The bank, which anticipates that the interest rate cutting cycle will begin in 2025, stated that net interest margins for banks would rise in this scenario. The institution estimated that for 2025, the net interest margin, excluding swap costs, will increase by 130 basis points compared to the previous year to reach 6 percent for private banks, while for public banks, this margin is expected to rise by 50 basis points annually to 3.6 percent.

According to this model, the institution stated that inflation-adjusted return on equity for private banks will move into positive territory.

"THERE ARE MANAGEABLE RISKS"

Recalling that valuations for both private and public banks reached domestic peak levels at the start of the previous disinflation cycle, Goldman Sachs analysts noted that private and public banks are trading at a discount of approximately 18-16 percent compared to their maximum price-to-earnings ratios over the last 5 years. As reported by Ekonomim, while there are parallels between the previous disinflationary cycle and the current one, the institution pointed to high interest rates this time around, stating that they see manageable risks regarding asset quality in the short term and, accordingly, remain more positive on private sector banks that have higher capital buffers and appear undervalued.

TARGETS AND RECOMMENDATIONS FOR BANKS

It raised its target price for Akbank from 72 TL to 86 TL and maintained its "buy" recommendation.

It raised its target price for İş Bankası C from 14.8 TL to 20 TL and upgraded its recommendation from "neutral" to "buy".

It raised its target price for Yapı Kredi Bankası from 38 TL to 42.5 TL and maintained its "neutral" recommendation.

It raised its target price for Garanti BBVA from 91 TL to 111 TL and maintained its "neutral" recommendation.

It raised its target price for VakıfBank from 16 TL to 19 TL and maintained its "sell" recommendation.

It raised its target price for Halkbank from 11.9 TL to 15.6 TL and maintained its "sell" recommendation.

News Source: 12punto