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IsBankasi Selling at 85% of Its Book Value

Turkiye Is Bankasi (ISATR)(ISBTR)(ISCTR)(TIBD) is Turkey's first public bank and premiere national financial institution. The bank operates 1,011 branch networks throughout Turkey, giving it one of the largest branch networks in the country. It international network is comprise of one branch in the UK, one in Bahrain, 13 in the Turkish Republic of Northern Cyprus. Turkiye Is Bankasi operates two international subsidiares, one in the Republic of Ireland (Is Dublin Financial Services Plc), and the second in Germany (Isbank GmbH) that operates 11 branches there.

Business History and Operations

Turkiye Is Bankasi was founded in 1924 with two branches and 37 staffers under the leadership of Celal Bayars, its first general manager. The bank was established with the donations of cash and gold bullion from Indian Muslims through the Imperal Bank of India to support the Turkish War of Independence.

List of contribution Turkiye Is Bankais has made to banking In Turkey:

  • Saving accounts
  • Mutual funds
  • Overseas branches
  • In-house securities division
  • Interactive banking service
  • Mobile banking
  • Intruduction of ATMs
  • Electronic banking in the country
  • Allow money to be put directly to the clients account
  • Allow online banking among clients without a computer


31.12.2013 Bank Only Consolidated
Main Balance Sheet and Income Statement Items Billion TL Billion USD Billion TL Billion USD
Loans 134,8 63,8 145,2 68,7
Deposits 121,0 57,3 121,8 57,7
Shareholders' Equity 23,6 11,2 25,9 12,3
Total Assets 210,5 99,6 241,6 114,4
Total Operating Income 10,3 4,9 14,4 6,8
Net Income 3,2 1,5 3,6 1,7
Key Financial Indicators Bank Only Consolidated
Loans/Total Assets 64.1% 60.1%
NPL Ratio 1.6% 1.7%
Capital Adequacy Ratio 14.4% 14.3%
Net Interest Margin (1) 4.2% N/A
Cost/Income(2) 44.6% 46.0%
Return on Average Equity 13.7% 14.3%
Return on Average Assets 1.6% 1.6%
Market Position Market Share(3) Ranking(4)
Loans 13.5% 1st
TL Loans 12.4% 1st
FX Loans 16.2% 1st
Deposits 12.7% 1st
TL Deposits 11.5% 1st
FX Deposits 14.7% 1st
Total Assets 12.9% 1st
Isbank with Numbers
Branches 1,309
ATMs 5,673
Employees 24,129
POS 279,218
Credit Cards 6,242,695
Debit Cards 9,625,382

[1]Based on bank-only MIS data
[2]Adjusted for one-off items. (One-off expenses for 2013: TL 417 mn.)
[3]Market share calculations are based on weekly BRSA data excluding participation banks. Total assets market share is based on monthly BRSA data.
[4]Ranking among private banks


Turkiye Is Bankasi A.S. has a solid balance sheet, a 13% return on equity, and above 1.0% return on assets. Selling at only 5.6 times earnings and now selling at 85% book value.

Compared Valuation to Wells Fargo

Wells Fargo (WFC) P/E 12.4 P/B 1.6 Return on Equity 13.99% Return on Asset 1.51% Dividend Yield 2.6%
Turkiye Is Bankasi A.S. (TIBD) P/E 5.6 P/B 0.85 Return on Equity 13.7% Return on Asset 1.6% Dividend Yield 3.61%

If the company sold at the same P/E ratio as Wells Fargo, its stock price would triple. The company should sell at a premium above book value because its return on assets is above 1.0. That means the stock price would double just from selling above book value.

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Philtcu - 1 month ago

Thanks for the writeup. Looks interesting. The OTC ticker (TYABF) has ZERO volume. How would you purchase it?

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