Bloomberg News

Turkey’s Vakifbank Surges on Cheaper Valuation: Istanbul Mover

February 01, 2012

Feb. 1 (Bloomberg) -- Turkiye Vakiflar Bankasi TAO, a state-run lender, headed for its highest level in 11 weeks, after a 30 percent fourth-quarter plunge made it attractive on the basis of relative valuation.

Vakifbank shares surged 5.9 percent to 3.06 liras, its strongest close since Nov. 11. Akbank TAS, part-owned by Citigroup Inc., was the only one among Turkey’s 16 listed banks to outperform Vakifbank. Akbank jumped 6 percent to 7.08 liras.

“Vakifbank is the most attractive large-cap Turkish bank in terms of multiples,” Ates Buldur, an analyst at Credit Suisse Group AG, said in an e-mail.

The bank’s current price-to-book ratio is 0.8 compared to the Turkish banking index’s 1.4, according to data compiled by Bloomberg. Its price-to-earnings ratio is at 5.4 compared with 8.7 for the industry, implying the stock is trading cheaper than its peer group.

Vakifbank has plummeted 18 percent since October compared with a 9.8 percent decline in the banking index. It has catapulted 25 percent this year, outpacing a 17 percent advance for the industry. The bank deserves a “higher valuation and the market has been realizing it in the past couple of weeks,” Sadrettin Bagci, an analyst at Yatirim Finansman Securities, a broker, said.

The bank’s earnings may lag fourth-quarter estimates, according to Bagci, who forecasts net income of less than 250 million liras ($142 million) compared with an estimate of 284 million liras, according to the median of seven estimates on Bloomberg. The bank will announce its financial results on Feb. 17.

--Editors: Ash Kumar, Linda Shen

To contact the reporter on this story: Benjamin Harvey in Istanbul at

To contact the editor responsible for this story: Gavin Serkin at

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