Akbank (AKBNK) Q3 2024 earnings summary

Executive summary

• Net income for the first nine months was TL 33.1 billion, down 36% year-on-year, with core revenue up 17% YoY driven by strong fee income growth offsetting net interest income decline.

• ROE stood at 20.2% and ROA at 2.0% for 9M24, reflecting sector-wide profitability pressures.

• The bank is focused on customer-centric strategies, digitalization, sustainable finance, and prudent risk management, supported by a strong capital base (Total Capital 17.2%, Tier 1 14.6%).

• Active customer base grew 69% since 2021, surpassing 14 million, with digital penetration reaching 86%.

• Fee income and digital customer acquisition are key drivers of recurring revenues and long-term profitability.

Financial highlights

• Net income for 9M24 was TL 33.1 bn, down 36% YoY; core revenues increased by 17% YoY, driven by fee income growth offsetting net interest income decline.

• Net fees and commissions surged 136% YoY to TL 51.8 bn, with fee-to-OpEx ratio reaching 84% (91% in Q3).

• Operating expenses increased 88% YoY to TL 61.6 bn; cost/income ratio rose to 56.7%.

• TL loans up 30% year-to-date, FX loans up 25% year-to-date, with significant market share gains in consumer, mortgage, and SME loans.

• Adjusted NIM for nine months at 2.2%, with Q3 NIM at 2%, below revised guidance.

Outlook and guidance

• TL loan growth expected at ~40% for 2024; FX loan growth (USD) projected above 20%.

• Net fees and commissions growth to exceed 100% for 2024; NIM guidance at ~3% with downside risk.

• Cost of risk expected to normalize to 1% for full year, with 1.5%-2% as a proxy for 2025.

• Opex growth guided at ~70% for the year; NPL ratio expected around 2% with some downside risk.

• Downside risk to NIM and ROE guidance due to sector-wide challenges, but Q3 is seen as the earnings trough.