In This Article:
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Net Interest Margin (NIM): Positive swap adjusted NIM achieved, with a 122 basis points expansion in Q4 2024.
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Net Interest Income: Increased by 126% on a quarterly basis in Q4 2024.
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Fee Income: Annual growth of 115%, with a quarterly increase of 8% in Q4 2024.
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Operating Expenses (OpEx): Flat compared to the previous quarter; year-over-year increase in line with average CPI inflation.
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Return on Equity (ROE): Stood at 16% for 2024.
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TL Loan Growth: Annual growth of 40% in Turkish Lira loans.
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FX Loan Growth: Annual growth of 21% in foreign currency loans.
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Deposit Growth: 38% annual growth in TL deposits; 2% decline in FX deposits.
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NPL Ratio: Approximately 2% at the end of 2024.
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Stage 3 Coverage Ratio: Maintained at around 73%.
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Capital Adequacy Ratio: 16.8% without BRSA's forbearance measures; Common Equity Tier 1 at 13.9%.
Release Date: February 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Turkiye Is Bankasi AS achieved a strong annual fee income increase of around 115%, outperforming their target.
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The bank maintained a solid capitalization with a capital adequacy ratio of 16.8% and a common equity Tier 1 ratio of 13.9%.
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The bank's net interest income saw a remarkable quarterly increase of 126%, indicating effective asset repricing.
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Turkiye Is Bankasi AS has a strong focus on SME lending, achieving significant market share increases in this segment.
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The bank's digital transformation efforts have resulted in a high level of digital transactions, reaching 97% by the end of 2024.
Negative Points
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The bank faced significant pressure on net interest margins due to elevated funding costs from tight monetary policy.
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Return on equity stood at 16% in 2024, reflecting the challenges in maintaining profitability amidst margin pressures.
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There is a potential risk of further regulatory tightening on growth caps if inflation remains sticky.
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The bank anticipates a moderate increase in non-performing loans (NPL) ratio to around 3% in 2025.
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The net cost of risk is expected to increase to 200 basis points in 2025, indicating potential asset quality challenges.
Q & A Highlights
Q: Could you please share the underlying macro assumptions for your operating plan, including GDP growth, inflation, policy rate outlook, and the timing of the rate cuts? A: Our GDP growth expectation is 3.5% for 2025, with moderate growth in the first half due to a slowdown in production. We expect annual CPI inflation to be 27% by year-end. The Central Bank has started rate cuts, and we anticipate further cuts in the first half of the year, with the policy rate reaching around 30% by year-end. The Central Bank's CPI inflation expectation aligns with ours, and we foresee no negative surprises.