Turkiye Garanti Bankasi (GARAN) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 reached TL 25.4 billion, up 13% year-over-year, with ROE/ROAE at 30.5% and robust internal capital generation.

• Core banking income and revenue surged, with core NII up 68% quarter-on-quarter and core banking revenue up 61% year-over-year.

• Maintained sector leadership and market share gains in TL loans, consumer loans, and credit cards.

• Asset quality remained stable, with NPL ratio at 2.6% and Stage-2 loans at 10.5% of the portfolio.

• Capital adequacy ratios remained strong, with CET1 at 13% and CAR at 18.4% post-dividend payout.

Financial highlights

• Net income reached TL 25.4 billion, a 13% year-over-year increase, and net interest income rose 54.8% year-over-year to TL 30.4 billion.

• Core NII surged 68% quarter-on-quarter; net fees and commissions increased 58.6% year-over-year to TL 29.7 billion.

• Core banking revenues to assets hit 7.9% in 1Q, the highest level recorded.

• NPL ratio rose to 2.6%, with total coverage at 3.6%.

• Net cost of risk at 1.4%, below year-end guidance.

Outlook and guidance

• GDP growth for Turkey forecast at 3.5% for 2025; inflation estimate revised up to 29%-31% for year-end.

• Current account deficit to GDP expected to worsen to 1.5% in 2025.

• Maintains low-thirties ROE guidance and expects NIM expansion deferred to Q4.

• Net cost of risk expected to converge to 2%-2.5% by year-end.

• Strategic priorities include sustainable growth, customer experience, and people-focused initiatives.