Turkey Corporate Days: Turkish Banks Under Pressure

Turkish banks are facing high funding costs and sticky inflation but remain resilient due to strong fee growth and stable asset quality. Goldman Sachs favors rate-sensitive banks like Akbank and Isbank as they anticipate a rate-cutting cycle to begin in mid-2026.

Key Takeaways

• 1.Turkish banks are managing extreme macro pressures including year-end inflation expectations of 27%-31% and funding costs exceeding 40%.
• 2.Despite high funding costs, asset quality remains resilient across the sector, with banks maintaining their Cost of Risk (CoR) guidance.
• 3.The timing of 2026 interest rate cuts (expected in Jun/Jul) is the critical driver for Net Interest Margin (NIM) expansion and ROE targets.

Table of Contents

• Akbank (Buy)
• Garanti (Neutral)
• Isbank (Buy)
• Yapi Kredi (Buy)
• Turkey banks in 6 charts
• Investment thesis and Valuation
• GEM banks valuation
• Disclosure Appendix

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