Türkiye Vakiflar Bankasi Türk Anonim Ortakligi (VAKBN) Q2 2025 earnings summary

Executive summary

• Net income for the first half of 2025 reached TL 30 billion, up 57% year-over-year, outperforming the sector average of 35%.

• ROAE improved to 25.8% in 1H25 from 21.2% in 1H24, with ROAA at 1.4%.

• Core banking revenues rose 42% YoY and 25% QoQ, with fee and commission income up 55% YoY.

• TL deposit portfolio surpassed TL 2 trillion for the first time, with total deposits up 15% YtD and 11% QoQ.

• International funding reached USD 8.5 billion YtD, including a USD 750 million Eurobond issued at 7.38% yield.

Financial highlights

• Net interest income for 1H25 was TL 48.98 billion, up 34.8% YoY, with net fees and commissions income at TL 32.7 billion, up 54.8% YoY.

• Quarterly net income increased to TRY 10 billion, up from TRY 9 billion last quarter (excluding one-off provisions).

• Cost/income ratio improved to 38% in the first half, outperforming the sector average of 41%.

• Operating expenses increased 62% YoY to TL 52.6 billion in 1H25.

• NPL ratio increased to 2.5% from 2.05% sequentially; Stage 2 ratio rose to above 9%.

Outlook and guidance

• Turkish lira lending growth guidance revised to high twenties percent for the full year, in line with inflation.

• Hard currency lending growth guidance raised to high teens in dollar terms.

• Full-year swap-adjusted net interest margin guidance maintained at 4.5%.

• Fee income growth guidance increased from mid-20s to above 40% for the year.

• Net cost of risk guidance revised to 150 bps for the full year, with actual net CoR at 147 bps in 1H25.