 Traders are seen working at the Istanbul Stock Exchange in this Jan. 3, 2011 photo. Standard Ünlü says the current rally in Turkish equities should be an opportunity to sell bank shares. AA photo |
Investors should sell shares in Turkish banks during a rally in the benchmark index as more Central Bank steps to curb lending may reduce profit by as much as 10 percent in 2011, Standard Ünlü has said.
Fierce competition among banks is also likely to contribute to reduced earnings, Tunç Yıldırım, a director at Standard Ünlü Securities, Standard Bank Group’s Turkish unit, said in an e-mailed report Thursday.
“We would sell into strength in the current rally, as we expect the Central Bank and banking regulator to up the ante further by tightening the regulatory noose in January,”
Bloomberg News quoted Yıldırım as saying: “We now expect another 2 percentage points hike in reserve requirements, as total credit increased by 5 percent month-on-month in December against policymakers’ vehement calls for restraint.”
The Turkish Central Bank cut the benchmark interest rate by 0.5 percentage points to 6.5 percent on Dec. 16 and then raised banks’ reserve requirements to curb lending in an effort to stave off a credit bubble.
The move led to a decrease in available funds of around 8 billion Turkish Liras for banks, and the likelihood of a decline in earnings this year is high, Ergün Özen, the chief executive officer of Garanti Bank, said in an interview with Radikal newspaper published Thursday.
Meanwhile, the November profits for Turkey’s banking sector stood at 1.647 million Turkish Liras, according to data released by the Banking Regulation Supervision Agency.
The figure represents a decline of 11 percent compared to October. According to an analysis by İş Investment. Currency losses by foreign lenders active in Turkey contributed to the decline.
Fierce competition among banks is also likely to contribute to reduced earnings, Tunç Yıldırım, a director at Standard Ünlü Securities, Standard Bank Group’s Turkish unit, said in an e-mailed report Thursday.
“We would sell into strength in the current rally, as we expect the Central Bank and banking regulator to up the ante further by tightening the regulatory noose in January,”
Bloomberg News quoted Yıldırım as saying: “We now expect another 2 percentage points hike in reserve requirements, as total credit increased by 5 percent month-on-month in December against policymakers’ vehement calls for restraint.”
The Turkish Central Bank cut the benchmark interest rate by 0.5 percentage points to 6.5 percent on Dec. 16 and then raised banks’ reserve requirements to curb lending in an effort to stave off a credit bubble.
The move led to a decrease in available funds of around 8 billion Turkish Liras for banks, and the likelihood of a decline in earnings this year is high, Ergün Özen, the chief executive officer of Garanti Bank, said in an interview with Radikal newspaper published Thursday.
Meanwhile, the November profits for Turkey’s banking sector stood at 1.647 million Turkish Liras, according to data released by the Banking Regulation Supervision Agency.
The figure represents a decline of 11 percent compared to October. According to an analysis by İş Investment. Currency losses by foreign lenders active in Turkey contributed to the decline.
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