HSBC upgrades outlook for Turkish banks to positive

In a report prepared by Domenico Santoro, HSBC stated that the normalization of Türkiye's policy interest rate is expected to continue supporting banks' net interest margins. Although uncertainties surrounding the future direction of monetary policy persist due to inflationary pressures, the report suggested that Turkish banks have reached a significant turning point in their profitability margins.

HSBC stated that it favors Turkish banks over their Polish and South African counterparts from a valuation perspective within the Central and Eastern Europe, Middle East, and Africa (CEEMEA) region. The report highlighted the relatively high valuations of Polish and South African banks, while Turkish banks were considered more attractively valued. HSBC also expects a recovery in the global banking sector and indicated that it has gradually adopted a more positive stance toward U.S. and European banks.