Türkiye Vakiflar Bankasi Türk Anonim Ortakligi (VAKBN) Q3 2024 earnings summary

Executive summary

• Achieved quarterly net income of TRY 8 billion, up 12% sequentially, and nine-month net income of TL 27.2 billion, up 81% year-over-year, outperforming sector averages.

• Surpassed $100 billion in total assets for the first time, reaching $104 billion, up 17% year-over-year, and maintained a leading position among Turkish banks.

• Core banking revenues and pre-provisioning profit grew 125% and 81% year-over-year, respectively.

• Continued leadership in Turkish banking sector with top market share in TL and FC loans and deposits among listed banks.

• Total assets increased by 27.62% year-over-year to TL 3,569 billion as of September 30, 2024.

Financial highlights

• Net interest income for 9M24 was TL 56.1 billion, up 140% year-over-year, with net fees and commissions income totaling TL 33,175 million.

• Quarterly average ROE was 16.4%; nine-month cumulative average ROE reached 19.5%.

• Net interest margin reported at 3%, with swap-adjusted NIM improving from 1.25% to 2.37%.

• NPL ratio increased to 1.8% (or 1.77%), mainly from retail and credit card inflows, with net cost of risk at 85 bps.

• Operating expenses rose 82% year-over-year, outpacing the sector average.

Outlook and guidance

• Q4 expected to be the strongest quarter for net interest margin and profitability due to CPI-linked portfolio adjustments, with TL 10.3 billion additional interest income expected.

• Full-year ROE guidance revised down to low twenties from 30%, reflecting limited NIM recovery.

• For 2025, a significant contraction in securities yield is expected in Q1 due to lower CPI assumptions, partially offset by improved core spreads.

• Management expects continued support for the national economy through lending and innovation, focusing on sustainable growth and strong capital and liquidity.

• The bank aims to further expand international funding and product offerings.