The second quarter balance sheet season starts next week at Borsa Istanbul.

The deadline for non-consolidated balance sheets is August 9 and August 19 for consolidated balance sheets.

Yapı Kredi, Arçelik and TOFAŞ stand out among the companies that will announce the first review of next week’s schedule. The three companies are expected to announce their balance sheets on July 26.

Akbank and TAV for July 27; Guaranteed BBVA and Ford Otosan for July 28; Anadolu Sigorta’s balance sheets are due on July 29.

According to reports from research units, the strong trend in corporate profitability is expected to continue.

In the second quarter of 2022, Ünlü&Co expects earnings per share in the banking sector to increase by 458% year-on-year and 53% quarter-on-quarter.

Non-banking sectors, on the other hand, expect earnings per share to rise 145% year-on-year and 47% quarter-on-quarter. In total, he expects the profitability of Turkish equities to increase by 236% over one year and 50% over one quarter.

What are the expectations vis-à-vis the banking sector?

According to BRSA data, while the sector made a net profit of TL 33.9 billion in May, this figure indicates a year-on-year increase of 742%. The profitability of the sector in the first 5 months of the year increased by 434% compared to the previous year and reached 132.1 billion TL. According to data from BRSA, the sector’s capital adequacy ratio increased to 37% in the first 5 months of the year and the decrease in the trailing ratio attracted attention.

In the first quarter of 2022, the contribution of CPI-indexed securities in the banking sector, the increase in the wage-commission item, the widening of spreads in TL and foreign currency loans were among the factors that positively affected the profitability. In addition, a strong improvement was observed in the sector’s margins and return on equity. In the second quarter of this year, profit growth is expected to continue across all banks.

In the current balance sheet period, the size and valuation of CPI-linked securities should continue to support improving margins and return on equity. In addition, the contribution of currency-protected deposits is expected to help finances through low funding costs.

Ak Investment’s report, which includes expectations for the second quarter, states for the banking sector: “Although profit growth is strong in all banks in general, İşbank on the private banking side, Vakıfbank on the banking side public and Albaraka Türk on the side of the small banks. scale banks (partly with a weak base effect) On the other hand, Halkbank shows a more modest increase in profits compared to other banks, as it allocates large reserves to cover the gap in the provision rate previous quarters.

Industry Outlook

In the process of high volatility in global markets after Russia’s invasion of Ukraine, rising global commodity prices, emerging currencies affected by the strengthening of the dollar (weakening TL), high inflation and the continuation of strong economic activity will be the main factors in the financial situation of Turkish companies. .

However, TL depreciated around 15% against the dollar in the second quarter, which could put pressure on some companies’ finances.

Yatırım Finansman shared the following expectations for some non-banking sectors.

While we expect the aerospace industry to report strong sales figures, we anticipate an increase in operating performance from THY, Pegasus and TAV.

With refining margins rising in the second quarter, we expect Tüpraş to report the strongest quarterly results in dollar terms. We expect margins to improve in the second quarter at the Alarko coal-fired power plant, which we believe will be positively affected by rising electricity prices.

We expect another solid quarter for Ereğli and Kardemir, but the best period will be behind for these companies. We expect accelerated revenue growth and increased profitability for Bim and Migros. Automotive companies’ balance sheets remain strong thanks to strong domestic demand and rising margins. Telecommunications companies, Arçelik and Anadolu Sigorta are companies from which we expect weak results.

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