First, the good news: Turkish banks' underperformance may be behind us. Since their May 2013 peak, Turkish banks are down 55% in USD, underperforming EM peers by 45%, in line with the average performance delivered in the last 4 selling cycles since 2005. We upgrade Akbank to O/W, PT of TRY 7.59 (25% upside), keep Halk O/W new PT of TRY14.53: at its recent investor day Akbank confirmed its commitment to improving profitability, maintaining focus on its best in class cost efficiencies, which we see as a competitive advantage in times of revenue pressures.
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