Bank Asya Advances Most in 10 Weeks on Debt Sale: Istanbul Mover

Asya Katilim Bankasi AS jumped the most in almost 10 weeks after the Islamic lender from Turkey raised $250 million in an overseas debt sale and after Deutsche Bank AG lifted its recommendation for the stock.

Bank Asya, as the lender is known, advanced 4.1 percent, the biggest gain since Jan. 16, to 2.31 liras at the close in Istanbul. More than 26 million shares changed hands, or 1.5 times the stock’s three-month average daily volume. The Istanbul Stock Exchange National 100 Index added 1.5 percent, climbing for a fourth day.

The lender issued subordinated Islamic debt with a 10-year maturity, agreeing to pay an annual profit rate of 7.5 percent, according to a filing with the Istanbul bourse yesterday. The move may boost the capital adequacy ratio, a measure of financial strength, by 236 basis points to 15.6 percent by year-end, Deutsche Bank analysts Hilal Varol and Kazim Andac said in a report e-mailed today.

A “considerable easing of concerns” relating to capital adequacy and “expectations of an improvement in the asset quality picture” starting from the second half of 2013 support share price performance, the analysts said.

Varol and Andac raised the stock to buy from hold, increasing their price target to 2.6 liras per share.

The new capital structure would lead Bank Asya to “revise branch and growth targets,” Vatan newspaper quoted Chief Executive Officer Ahmet Beyaz as saying today. The lender’s goal of 22 percent growth in cash loans for this year may also be revised, Beyaz was cited as saying in the newspaper.

Bank Asya reported net income of 190.4 million liras ($105 million) for 2012, compared with a profit of 216.1 million liras a year earlier. Five analysts recommend buying the lender’s shares, while 11 maintain a hold and four suggest sell, according to data compiled by Bloomberg.

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