Türkiye Vakiflar Bankasi Türk Anonim Ortakligi (VAKBN) Q4 2024 earnings summary

Executive summary

• 2024 reported net income was TRY 40.4 billion, up 61% year-over-year; ROAE was 20.7%.

• Q4 net income reached TRY 13.2 billion, up 64% sequentially and above market consensus; adjusted net income was TRY 19.7 billion.

• Adjusted full-year net income was TRY 44.4 billion, up 77% year-over-year; adjusted ROAE was 22.7%.

• Core banking revenues rose 87% year-over-year to TRY 146 billion, ahead of sector growth of 58%.

• Total loans exceeded TRY 2 trillion and deposits surpassed TRY 2.5 trillion; total assets topped TRY 4 trillion for the first time.

Financial highlights

• 2024 net interest income was TRY 98.98 billion, up 90.5% year-over-year; net fee and commission income grew 81%.

• 2024 NIM was 3.3%, up 59 bps year-over-year; Q4 NIM reached 5.2%, or 3.8% excluding additional CPI revenue.

• 2024 cost-to-income ratio was 40.2%, versus a 42% sector average; cost over average assets was 2.2% versus 2.9% for the sector.

• Q4 TL lending grew 8.4% QoQ versus 7.3% for the sector; FX lending grew 4.6% versus 2.7%.

• Payment system fees accounted for 51% of net fee income.

Outlook and guidance

• 2025 TL lending growth guided at mid-teens; hard currency lending growth at high single digits in USD terms.

• Swap-adjusted NIM expected to improve by 2 percentage points to 4.3% in 2025; net fee and commission income growth guided at mid-20s%.

• 2025 net cost of risk guided at 100 bps and NPL ratio expected to rise to 2.5%, mainly from micro and SME segments.

• Average ROE guided at mid-20s%, with upside potential; OpEx budgeted above average inflation.

• Guidance assumptions are based on the government’s Medium-Term Program; 2025 Oct-Oct CPI expectation is 23.6%.