Turkiye Garanti Bankasi (GARAN) Q2 2025 earnings summary

Executive summary

• Net income for H1 2025 reached TL 53.6 billion, up 20% year-over-year, with a 30.7% ROAE and 3.1% ROAA, supported by resilient net interest income, strong fee generation, and provision reversals.

• Total assets stood at TL 3.82 trillion, with customer deposits growing 26.7% to TL 2.66 trillion and loans comprising 57% of total assets.

• Maintained leadership in TL loans, consumer loans, and credit cards among private banks, with digitalization and sustainability as strategic priorities.

• Asset quality improved with a stable NPL ratio at 2.6% and declining Stage-2 loan share.

• Capital adequacy ratio stood at 15.6% (excluding forbearance), with a new Tier-2 issuance set to boost capital in Q3.

Financial highlights

• Net interest income rose 42.7% year-over-year to TL 82.4 billion, and net fees and commissions increased 56.5% to TL 65.5 billion, covering 86% of operating expenses.

• TL loan growth accelerated to 10% quarter-over-quarter, with TL performing loans up 26% year-to-date.

• Operating expenses grew 69% year-over-year, with a cost/income ratio of 47.7% in H1 2025.

• Loans/deposits ratio at 81.8%; liquidity coverage ratio at 134%, well above regulatory minimum.

• Net provisions declined in Q2 due to unbudgeted large ticket provision reversals.

Outlook and guidance

• Maintains low 30s ROE guidance for the year, expecting to settle near the lower bound, with 2025 GDP growth forecast at 3.5% but downside risks from tight monetary and fiscal policy.

• NIM headwinds expected to be mitigated by provision releases and robust fee growth; margin expansion delayed by two quarters due to CBRT's tight stance.

• The bank aims to maintain strong capital, focus on TL-based growth, and further digitalize customer experience.

• New sustainable finance target set at TL 3.5 trillion for 2018-2029, with ongoing support for decarbonization and responsible banking.

• Confident in operational agility to navigate evolving market conditions.