Akbank (AKBNK) Q2 2024 earnings summary

Executive summary

• Economic activity in Turkey remained strong in Q1 2024 with 5.7% year-on-year growth, but is expected to slow due to tight financial conditions and fiscal tightening; 2024 GDP growth forecast is maintained at 3.5%.

• Net profit for H1 2024 was TL 24.1 billion, down 22% year-on-year, with ROE at 22.4% and ROA at 2.3%.

• Digital transformation and customer base expansion supported sustainable profitability and strong fee generation, with digital customers reaching 12 million and digital penetration at 87%.

• Maintained strong capital buffers, with capital adequacy ratio at 19.26% and Tier 1 at 13.9%.

• The macroeconomic environment was marked by high inflation, peaking at 75.4% in May, and tight monetary policy.

Financial highlights

• Revenues rose 11% year-on-year to TRY 69,582 million for H1 2024; net income fell 22% year-on-year to TRY 24,104 million.

• Net interest income for H1 2024 was TL 35,865 million; net fees and commissions income was TL 32,100 million, up 172% year-on-year.

• Operating expenses rose 96% year-on-year to TL 39,800 million; cost/income ratio increased to 56%.

• NPL ratio remained stable at 2.1–2.3% in H1 2024; Stage 2+3 loans/total at 8.1%.

• Total assets grew to TL 2.18 trillion; deposits reached TL 1.46 trillion.

Outlook and guidance

• 2024 ROE guidance revised to mid-to-high 20% range; NIM guidance lowered to around 3%.

• Net fees and commissions growth guidance raised to over 100%; opex growth expected in the high 40% to 70% range.

• Cost/income ratio expected in the mid-to-low 30s to high-40% range; net cost of credit guidance improved to around 100 basis points.

• TL and FX loan growth guidance maintained at over 40% and over 20%, respectively.

• Fee income growth expected to remain strong even in a normalized rate environment, supported by diversified sources.