The first round of Turkish elections, which has left incumbent President Recep Tayyip Erdogan as the winner, but forces a second Round With Kemal Kilicdaroglu, Leader of the Opposition, on 28 May. The country has proved polarized, with many blocs linking it to accusations of alleged fraud or authoritarianism on the part of the authorities. Two weeks are left for the dog to come face to face to clarify the future of the country and it is visible in the markets as well.
The uncertainty in Turkey also punished BBVA in Spain, whose shares fell more than 4% on the stock market and were the most bearish on the IBEX 35 this Monday. The financial institution headed by Carlos Torres owns Garanti Bank, which makes Turkey its third largest market. Hence the morning earthquake: of the 600 values ​​that make up the Stoxx 600 European stock index, it is the one that registers the biggest decline.
Between January and March, the bank achieved a net chargeable profit of 277 million in the country, representing 15% of the 1,846 million recorded at the group level. Similarly, the income (gross margin) in the country for the first quarter of 2023 stood at 802 million euros, which was 11.5% of the 6,958 million recorded by the bank across all its markets and business segments. This is the data provided by five days,
20 years of Erdogan’s government coincided with BBVA’s strategic commitment to Turkey – doubled again in 2021 with a takeover bid to control Guaranty – and also with hyperinflation that forced the bank to make significant accounting adjustments. while the lira fell to a minimum. , Turkey is also the market in which Onur Genç, the current director of the bank, has established himself as a banker.
The Bist 100, the reference index of the Turkish stock market, fell 6.4%, according to analysts, its biggest decline since the beginning of February, the worst result for the markets going into the second round. Within the Turkish stock market, the banking sector is the most punished with a decline of 9.5%. The BIST 100 index rose 9% last week as elections showed Erdogan a defeat, ending his two decades in power as president. The banking sector grew by 26% last week.
Turkey’s economy, badly affected by the devaluation of the lira, inflation and government intervention in its central bank’s monetary policy, is highly sensitive to changes in market sentiment. The country’s public and private sectors have foreign debt equivalent to $196,000 million in foreign currency that matures in the next 12 months. This is about 20% of Turkey’s GDP.
