(CercleFinance.com) – BBVA now owns 85.97% of the capital of Garanti Bankasi (activities in Turkey). The group has confirmed the final purchase of an additional 36.12% stake in the Turkish subsidiary. Following this operation, Credit Suisse confirms its neutral opinion on the stock with a target of 5.60 E.
The analyst estimates that the transaction will reduce the current CET1 ratio of 12.7% by 23 basis points (compared to an estimated 34 basis points for a 100% stake).
“We continue to believe that the new stake significantly increases the group’s dependence on the profits of the Turkish subsidiary. We underline the caution of our analysts on the outlook for the country, which could lead to the introduction of hyperinflationary accounting as early as Q2 22 ‘says Credit Suisse.
‘ We see Turkey contributing 16% of group net profit for FY22E (compared to 9% pre-Covid for FY19). Our economists have sharply revised inflation forecasts for the country due to rising commodity prices, negative impacts on foreign exchange earnings related to tourism in Russia and Ukraine, and the depreciation of the lira’ adds analysis office.
Credit Suisse believes that the Euribor increases in Spain and the significantly improved outlook in Mexico could provide enough support to allay concerns about Turkey.
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