Türkiye Halk Bankasi (HALKB) Q1 2025 earnings summary

Executive summary

• Total assets rose 32.9% year-over-year and 6.7% quarter-on-quarter, surpassing TRY 3.2 trillion, driven by securities growth.

• Net income surged 81.4% quarter-on-quarter to TRY 7.51 million, with ROE improving to high teens; net profit for Q1 2025 was TRY 7.26 billion, a 29.5% year-over-year increase.

• Maintained leadership in SME lending, with SME loans comprising up to 55% of the commercial loan portfolio.

• FX loans and deposits gained momentum, with FX loans now 28.9% of total and FX deposits 38% of total.

• Capital adequacy ratio declined to 13.58% from 15.10% at year-end 2024.

Financial highlights

• Net interest income surged 86% quarter-on-quarter, with headline NIM rising to 2.9% from 1.9% and adjusted NIM to 2.5% from 0.2%.

• Net fee and commission income increased 52.8% to TRY 13.27 billion.

• Total deposits increased 10.2% quarterly and 33.7% year-over-year, exceeding TRY 2.6 trillion.

• Operating expenses rose 36.6% year-over-year, with cost/income ratio at 69.4%.

• NPL ratio increased to 2.4% from 2.1% at year-end 2024.

Outlook and guidance

• Confident in navigating uncertainty and sustaining strong results throughout 2025, leveraging additional financial sources and potential Tier 1 capital issuance.

• Management expects continued stable growth, focusing on SME, women, and youth entrepreneurship lending, and digital transformation.

• Asset quality expected to gradually recover in the second half of 2025 if the CBRT pivots to a rate cut cycle.

• Prudent provisioning and high FX liquidity position (FX LCR at 224%) support resilience.

• New product launches include "Mortgage for Newlyweds" and "Welcome to Life" consumer loan packages.