Exciting Insights Unveiled: 2024 Q3 Banking and Insurance Sector Financial Survey Results Released!
Foreks - The 2024 Q3 banking sector balance sheet survey conducted by the financial news outlet for non-financial companies has concluded. Brokerage firms' expectations regarding the financials indicate a contraction in profits for the banking sector, while an increase is anticipated for the insurance sector. According to the survey conducted with the participation of 14 brokerage firms, a 47.1% decrease in net profit is expected for the banks surveyed compared to the same period last year. For the insurance sector, an annual increase of 30% is projected.
The Q3 earnings season on Borsa Istanbul commenced with ASELSAN. In the banking sector, Akbank (IS:AKBNK) will be the first to announce financial results on October 24, 2024. Analysts identify the ongoing high cost of deposits, the regulatory pressures inhibiting growth, and the deceleration in economic activity—leading to increased provisioning obligations from consumer loans—as key factors causing a limited profit contraction.
The deadline for publicly traded banks on Borsa Istanbul to submit their Q3 2024 consolidated and non-consolidated financial results to the Public Disclosure Platform (KAP) is November 11, 2024. For non-consolidated companies, the deadline is October 30, 2024, while for consolidated companies, it is November 11, 2024.
In banking, analysts have highlighted dynamics such as recovery in TL loan growth and the TL credit-deposit spread, slowdown in FX loans, improvement in net interest margins, deceleration in fee and commission income, sharp decline in swap funding costs, limited increase in CPI-linked bond returns, sharp rise in credit risk costs, deterioration in asset quality, significant increase in operating expenses, and severe decline in affiliate income with a rise in effective tax rates.
Regarding the effects of the loss of momentum in domestic demand on the non-financial sector, analysts draw attention to the downward risks on margins due to mid-year wage adjustments and increases in other expenses. The continued tightness in financial conditions is also expected to impact companies. For those operating in export-heavy or FX income-generating segments, the lira's continued real valuation remains a factor influencing profitability.
Deniz Yatırım anticipated that the inflation accounting impact for this period, compared to the previous three quarters, would have a lesser element of surprise for investors and suggested focusing more on macro expectations alongside sector-company stories instead of getting bogged down by confusing details, as was the case in the first half of the year.
The survey included participation from 14 firms: Deniz Yatırım, ÜNLÜ & Co, Tacirler Yatırım, ICBC Yatırım, Şeker Yatırım, Ziraat Yatırım, OYAK Yatırım, HSBC, Tera Yatırım, Garanti BBVA (BME:BBVA) Yatırım, Gedik Yatırım (IS:GEDIK), TEB Yatırım, Yapı Kredi (IS:YKBNK) Yatırım, and Ak Yatırım.
According to the regulatory directives from the Banking Regulation and Supervision Agency (BRSA) and the Insurance and Private Pension Regulation and Supervision Agency, banks and financial leasing, factoring, financing, savings financing companies, asset management companies, as well as insurance and pension firms, will not apply inflation adjustments according to TMS 29 in their financial statements for the relevant period.