Shares in Sberbank's Turkish unit Denizbank climb 19.93% d/d

Shares in Sberbank's Turkish unit Denizbank climb 19.93% d/d
Denizbank is the top financer of the Turkish tourism industry by far (pictured is an attraction in Altinkum on the Aegean coast).
By Akin Nazli in Belgrade December 6, 2018

Turkish private lender Denizbank’s shares gained 19.93% d/d on December 6, just short of the legal upper limit of 20% d/d, bringing the annual gain in the share price to 188%.

The Istanbul stock exchange’s benchmark BIST-100 index was down 1.22% d/d to 92,827 as of the market close while the year to date loss was 20%.

Denizbank’s share price stood at Turkish lira (TRY) 4.86 on November 21 at the close compared to the TRY9.87 it reached on December 6.

Some 99.85% of Denizbank is owned by Russia’s Sberbank with only a small part of its shares on free-float, according to the public disclosure platform (KAP) . Denizbank is subject to a delayed sale process under which Emirates NBD is to acquire 99.85% of it.

QNB Finansbank’s shares were up 19.97% d/d to TRY7.21, bringing the annual gain to 14%.

Qatar National Bank (QNB) owns 99.88% of Finansbank with only a small part of its shares are on free-float, according to the KAP.

Rough day for Akbank
Meanwhile, Akbank shares continued to fall on the day, losing another 4.71% d/d to TRY6.67 as of 16:00 local time after falling 5.2% on December 5.

Akbank emphasised in a conference call that its 30%-rights issue had nothing to do with the anticipation of new significant NPL inflows, and there are no new specific NPL files of concern, Sevgi Onur of Seker Invest said on December 6 in a research note.

Denizbank’s market capitalisation of TRY27.3bn makes it the third largest lender on the Borsa Istanbul by market cap, following Garanti Bankasi with TRY32.8bn and Akbank with TRY28bn.

Finansbank is in fourth place with a market cap of TRY20.1bn while Isbank is only in fifth place with TRY18.54bn.

Denizbank was Turkey’s 9th largest bank with TRY147bn worth of total assets at end-September while Finansbank ranked in 8th place with TRY181bn. Isbank was the country’s second largest bank, following state-owned Ziraat Bankasi, with assets worth TRY444bn, according to the latest data from Turkish banking association TBB.

Garanti is third with TRY411bn in assets and Akbank is fourth with TRY392.5bn in assets.

Banking loans volume down
Turkey's banking sector loans fell by 8.8% to TRY 2.45tn as of November 30 from as high as TRY2.69tn as of August 10, the central bank’s regular weekly bulletin showed on December 6.

In May, Sberbank signed a binding agreement to sell 99.85% of Denizbank's shares to Emirates NBD for TRY14.6bn ($2.7bn) using an escrow account mechanism. Additionally, Emirates NBD is to pay interest on the purchase price for the period from October 31, 2017 to the date of the transaction.

On November 1, Russian state-owned banking giant Sberbank said that it had delayed the sale of Denizbank until the end of 2018 or the beginning of 2019.

However, the Turkish competition authority confirmed on November 8 that Emirate NBD has applied to take over Denizbank together with its subsidiaries.

Denizbank is the top financer of the Turkish tourism industry by far, having provided more than $3bn of around $17.5bn worth of total loans extended by the Turkish banking industry to the tourism sector, Denizbank CEO Hakan Ates said on December 2 at a tourism congress.

Ates also said that Denizbank has restructured more than $1.5bn worth of tourism loans. He noted that there had been a stark decline in the average tourism revenue generated per tourist in Turkey.

The Turkish banking system’s NPL ratio stood at 3.4% at end-September, or at 4.9% when asset management companies’ figures are added, and at 13-14% when second-tier problem loans are added, and this data was not particularly anxiety-inducing, Ates also said.

Ates on November 29 also welcomed the recent asset-backed securities moves by the Capital Markets Board (SPK) and the banking watchdog BDDK. Securitization of long-term loans provided to state-guaranteed projects along with mortgage loans would help the Turkish banking industry allocate more funds to finance infrastructure projects and other sectors, Ates said during a televised interview on BloombergHT.

Securitization of loans provided to state-guaranteed projects subject to international arbitration could also be sold abroad, Ates added, saying that the Turkish banking industry has already provided $100bn worth of long-term loans, including $50bn to the energy industry.

International market conditions were not presently favourable for long-term borrowing and the lenders could use the liquidity raised through loan-backed securities to open fresh loans, according to Ates.

Speculative fluctuations were also observed in Turkiye Kalkinma Bankasi (TKB) shares in October. TKB shares were down 1.07% d/d to TRY31.52 on December 6 while its market cap stood at TRY15.93bn.

TKB suddenly became Turkey’s 22nd largest bank at end-September, moving up from 27th place, while its total assets rose to TRY16.4bn from TRY11bn.