Türkiye Is Bankasi (ISCTR) Q3 2024 earnings summary

Executive summary

• Net profit for the first nine months of 2024 was TL 34.7 billion, with total assets reaching TL 3.2 trillion and equity at TL 290.6 billion.

• Maintains position as the largest private bank in Turkey, with a stable ownership structure, extensive digitalization, and a strong focus on sustainability and ESG leadership.

• Return on equity reached 41.3% for 9M 2024, up from 24.1% in 2023; return on assets improved to 3.9% from 2.1%.

• Auditor issued a qualified review due to the reversal of TL 10 billion in free provisions, but found no other material misstatements.

• Strong trading income and fee generation contributed to profitability, with asset quality and capitalization levels remaining robust.

Financial highlights

• Total assets grew 30.3% year-over-year to TL 3,197,231 million as of Q3 2024; loans increased 35.2% to TL 1,551,309 million; deposits rose 23.4% to TL 2,050,380 million.

• Net income for 9M 2024 was TL 34,685 million, down 33.4% year-over-year; net interest income for 9M 2024 dropped 49.7% year-over-year to TL 25,638 million, while net fees and commissions surged 154.9% to TL 65,215 million.

• Swap-adjusted net interest income increased by 41% quarter-on-quarter.

• Clean trading income rose 5% quarterly and 63% year-over-year; net fee income up 13% quarterly and 155% annually.

• Operating expense/operating income ratio at 65.2% for Q3 2024, with net fees and commissions covering 77.6% of OPEX.

Outlook and guidance

• Annual inflation expected to hover around 43% at year-end 2024; GDP growth forecast at 3%.

• Downside risk to 2024 full-year NIM guidance due to delayed rate cuts and persistent funding cost pressures.

• Early 2025 NIM expected in the 2%-3% range, with improvement anticipated as monetary easing begins.

• Targets TL 300 billion in sustainable finance by 2026 and TL 100 billion for women entrepreneurs by 2028.

• No change in expectations for year-end 2024 as of 30 September 2024.