Turkiye Garanti Bankasi (GARAN) Q4 2025 earnings summary

Executive summary

• Net income for 2025 reached TL 111.3 billion, up 21% year-over-year, with ROE at 29% and ROAA at 2.9%, driven by strong net interest and fee income.

• Core banking revenues grew for the eighth consecutive quarter, up 66% YoY, supported by higher net interest income and resilient fee growth.

• Maintained sector-leading CET1 and capital adequacy ratios, with CAR at 17.5% and CET1 at 13.1% at year-end.

• Asset quality remained stable, with NPL ratio at 3.1% and cost of risk below guidance at 1.5%.

• Strategic focus on customer-driven growth, digital transformation, and efficiency through AI investments.

Financial highlights

• Net interest income including swap costs doubled YoY to TL 179.2 billion; NIM (incl. swap) rose 123bps YoY to 5.4%.

• Net fees and commissions increased 50% YoY to TL 145.5 billion, with payment systems contributing 67.5%.

• Operating expenses rose 67% YoY, with cost/income ratio at 48.8%, the lowest among peers.

• Loans/deposits ratio increased to 83.6%; TL loans/TL deposits at 102.2%.

• CET1 ratio at 13.1%, Capital Adequacy Ratio at 17.5%, and excess capital of TRY 179 billion.

Outlook and guidance

• GDP growth forecast at 3.7% for 2025 and 4% for 2026; inflation expected to decelerate to 25% by 2026 year-end.

• TL loan growth guided at 30%-35% YoY for 2026, with NIM expected to expand by 75bps and fee and OPEX growth at 30%-35%.

• ROAE expected to be mid-single digit, maintaining positive real ROE for 2026.

• Cost of risk expected to normalize to 2%-2.5%, reflecting absence of large provision reversals.

• Effective tax rate for 2025 expected at 20%-25%, below statutory rate due to deferred tax assets and subsidiary mix.