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

Executive summary

• Net income for 2024 reached TRY 40.4 billion, up 61% year-over-year, with Q4 net income at TRY 13.2 billion, up 64% quarter-over-quarter and above market consensus.

• Adjusted net income, excluding free provisions, was TRY 44.4 billion (+77% YoY), with Q4 adjusted net income at TRY 19.7 billion (+145% QoQ).

• Return on equity (ROE) for Q4 was 25% reported and nearly 37% adjusted; full-year ROE was 20.7%, with 2025 guidance in the mid-20s and upside potential.

• Core banking revenues surged 87% year-over-year, outperforming the sector's 58% growth.

• Total assets exceeded TRY 4 trillion by year-end 2024.

Financial highlights

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

• Net interest margin (NIM) in Q4 exceeded 5%, with full-year NIM at 3.3%; swap-adjusted NIM for 2024 was 2.3%, with 2025 guidance at 4.3%.

• Cost-to-income ratio for 2024 was 40%, outperforming the sector average; cost over average assets was 2.2%.

• Total loan portfolio surpassed TRY 2 trillion; deposits exceeded TRY 2.5 trillion.

• NPL ratio at year-end was 1.8%, up 50 bps YoY, remaining below the cycle average.

Outlook and guidance

• 2025 Turkish lira lending growth guided at mid-teens percent; hard currency lending 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 expected in the mid-20s percent; OpEx budgeted above average inflation.

• NPL ratio expected to rise to 2.5% in 2025, mainly from SME segments.

• Continued focus on sustainable funding and digital banking expansion.