Turkiye Garanti Bankasi (GARAN) Q4 2025 earnings summary

Executive summary

• Achieved TL 111.3 billion net income in 2025, up 21% year-over-year, with ROE at 29% and ROAA at 2.9%; excluding one-off tax effects, ROE would have been 30%.

• Core banking revenues grew for the eighth consecutive quarter, up 66% YoY, driven by lower funding costs and increased payment systems fees.

• Maintained sector-leading CET1 ratio and strong capital buffer, supporting long-term growth.

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

• Total assets grew to TL 4.55 trillion, a 51% increase from the prior year.

Financial highlights

• Net interest margin (NIM) reached 5.4%, up 123 bps YoY and 60 bps QoQ, with net interest income including swap costs doubling YoY to TL 179.2bn.

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

• Operating expenses increased 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%.

• NPL ratio increased modestly to 3.1%, with retail and credit card portfolios accounting for 70% of net NPL flows.

Outlook and guidance

• 2026 macro assumptions: 25% inflation, 32% policy rate, GDP growth of 4%.

• TL loan growth expected at 30%-35%, foreign currency loans at mid-single digits; net cost of risk to normalize at 2%-2.5%.

• NIM projected to expand by 75 bps, with improvement dependent on rate cuts and macroprudential measures.

• Fee and OPEX growth both guided at 30%-35%; OpEx growth to exceed inflation, with 80%-93% covered by fee income.

• Targeting mid-single digit positive real ROE for 2026, a turnaround from negative real ROE since 2018.