Akbank (AKBNK) Q4 2024 earnings summary

Executive summary

• Core revenues increased by 22% year-on-year, driven by robust fee income, digitalization, and strong customer acquisition, despite sector-wide profitability challenges and net interest income compression.

• Strategic focus on expanding the retail segment, digital innovation, and market share gains in key loan products supported recurring revenue growth.

• Asset quality remained sound with prudent risk management and advanced analytics, though some sector-wide deterioration and higher provisions were noted.

• Strong capital and solvency ratios provide resilience against market volatility and support sustainable growth.

• The independent auditor issued an unqualified opinion, confirming compliance with BRSA and TFRS standards.

Financial highlights

• Net income for 2024 was TL 42.4 billion, down 36% year-on-year; core revenue rose 22% YoY, driven by fee income.

• Net interest margin (swap adjusted) declined to 2.2% from 4.7% in 2023; cost/income ratio increased to 56.1%.

• TL loans grew by 41% year-on-year; FX loan growth (USD) at 23.3%, with significant market share gains in consumer, mortgage, business banking, SME, and microsegment loans.

• Net fees and commissions surged 116% YoY; fee-to-OpEx ratio reached 86%, exceeding 2025 target.

• Total provisions exceeded TL 46 billion; net total cost of credit at 128 bps (excluding currency impact).

Outlook and guidance

• 2025 guidance: TL loan growth above 30%, FX loan growth (USD) high-teens, NIM (swap adj.) around 5%, net fees & commissions growth around 40%.

• ROE is projected to exceed inflation, targeted above 30%, supported by margin recovery, funding cost optimization, and strategic loan book structure.

• Asset quality focus remains, with net total cost of credit guided at 150–200 bps and NPL ratio around 3.5%.

• Continued digital expansion and customer base growth targeted, with further market share increases across segments.

• ESG initiatives remain a priority, with MSCI ESG rating upgraded to AA and sustainability share in wholesale funding reaching 69%.