Turkiye Garanti Bankasi (GARAN) Q4 2024 earnings summary

Executive summary

• Achieved net income of TRY 92.2 billion in 2024, up 17% year-over-year when adjusted for prior provision reversals, with sector-leading ROAE at 33% and ROAA at 3.5%.

• Core banking revenue grew 62% year-over-year, driven by strong net interest and fee income, with payment systems a key contributor.

• Maintained leadership in Turkish lira loans and deposits, with 52% annual growth in TL loans and market share gains across all segments.

• Asset quality remained robust, with NPL ratio at 2.1% and net cost of risk at 78bps, aided by large ticket collections.

• Capital position strengthened, with CET1 at 16.07% and CAR at 19.77%.

Financial highlights

• Net interest income rose to TL 126.0 billion, up 46% year-over-year; core NII up 66% year-over-year.

• Net fees and commissions income more than doubled to TL 97.1 billion, with payment systems fees up 2.8x year-over-year.

• Cost-income ratio at 44%, best among peers; fees covered 91% of OpEx.

• Loans increased to TL 1.8 trillion, while deposits reached TL 2.2 trillion.

• NPL ratio held at 2.1%–2.14% after sales/write-downs; NPL coverage at 100%.

Outlook and guidance

• 2025 GDP growth expected at 2.5%, inflation at 26.5%, and policy rate to ease to 31%.

• Turkish lira loan growth projected above average CPI, with foreign currency loan growth in low teens.

• Net cost of risk expected to rise to 2%-2.5% due to normalization in asset quality.

• Margin expansion of 3% by year-end 2025 anticipated; fee growth to remain above CPI but normalize.

• Return on average equity guided to low 30s for 2025.