Türkiye Vakiflar Bankasi Türk Anonim Ortakligi (VAKBN) Q2 2024 earnings summary

Executive summary

• Net income for 1H24 reached TL 19.2 billion, up 248% year-over-year, significantly outperforming the sector average.

• Total assets grew by 15.76% to TL 3,237.5 billion as of June 30, 2024, with loans up 13.89% and deposits up 9.71% compared to December 2023.

• ROAE improved to 21.2% in 1H24 from 18% at YE23.

• The bank issued USD 550 million in additional Tier I capital and USD 700 million in subordinated bonds, strengthening its capital base.

• Strategic lending shift toward high-quality business loans and increased payment system fee income.

Financial highlights

• Core banking revenues rose 229% YoY to TL 57.5 billion in 1H24.

• Net interest income for 1H24 was TL 36.3 billion, up 342% YoY.

• Net fee and commission income grew 129% YoY to TL 21.1 billion.

• Operating expenses increased 84% YoY to TL 32.5 billion, with cost/income ratio at 39.7%.

• NPL ratio stood at 1.4% in 2Q24, with total NPL coverage ratio at 267%.

Outlook and guidance

• Management expects continued support for the national economy and sustainable growth, with a focus on technological innovation and capital strength.

• Management maintains a full-year cost/income ratio guidance of ~30%.

• TL core spreads and CPI linker income expected to support NIM in 2H24.

• Expected CPI income for 3Q24 is TL 21 billion, assuming 40.7% Oct-Oct CPI.