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

Executive summary

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

• Adjusted net income, excluding TL 4 billion in free provisions, was TL 44.4 billion, up 77% year-over-year; adjusted Q4 net income was TL 19.7 billion, up 145% quarter-over-quarter.

• Core banking revenues surged 87% year-over-year, with strong growth in net interest income and deposits.

• Total assets exceeded TL 4 trillion and the loan portfolio surpassed TL 2 trillion by year-end 2024.

• Market share in TL retail deposits rose to 1st place among listed Turkish banks.

Financial highlights

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

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

• NIM for 2024 was 3.3%, with Q4 NIM at 5.2%; Q4 net interest margin exceeded 5%, driven by additional CPI revenue.

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

• Q4 Turkish lira lending grew 8.4% QoQ vs. sector's 7.3%; hard currency lending grew 4.6% QoQ vs. sector's 2.7%.

Outlook and guidance

• 2025 guidance: mid-teens% Turkish lira lending growth, high single-digit% hard currency lending growth in USD terms.

• Swap-adjusted net interest margin expected to improve by 2 percentage points to 4.3% in 2025.

• Net fee and commission income growth guided at mid-20s%; OpEx budgeted above average inflation.

• Net cost of risk guided at 100 bps for 2025, with NPL ratio expected to rise to 2.5%.

• Continued focus on sustainable funding, digital banking expansion, and prudent risk management.