Türkiye Halk Bankasi (HALKB) Q2 2024 earnings summary

Executive summary

• Total assets increased by 18.8% to TRY 2.73 trillion as of June 2024, with loans up 8.1% and deposits up 15.5% year-over-year.

• Net profit for H1 2024 reached TRY 12.3 billion, a 93.6% increase YoY; Q2-24 net income was TRY 3,440 million, up 392.3% YoY but down 28.6% sequentially.

• The bank maintained leadership in SME lending, with SME loans comprising 55% of the cash loan portfolio and growing 6.0-7.2% YoY.

• Shareholders' equity rose to TRY 157.0 billion, up 9.9%, with capital adequacy ratio around 13.1-13.6% and CET-1 at 9.4%.

• Digital customer base increased 5% YoY to 6.3 million active users; the bank supports women and young entrepreneurs through targeted loan programs.

Financial highlights

• Net interest income was TRY 9,751 million in Q2-24, down 26.4% QoQ but up 101.6% YoY; for H1 2024, net interest income increased 10.3% to TRY 24.9 billion.

• Net fees and commissions income rose 19.4% QoQ and 127.5% YoY to TRY 9,573 million in Q2-24; H1 2024 net fee and commission income grew 137.5% to TRY 18.8 billion.

• Total operating revenues for Q2-24 reached TRY 14,693 million, up 3.3% QoQ and 15.6% YoY; interest income surged 180.6% YoY to TRY 303.3 billion in H1 2024.

• Operating expenses contracted 11.6% QoQ in Q2-24, improving cost/income ratio to 77.7%; interest expense rose 225.6% YoY to TRY 278.4 billion in H1 2024.

• Return on equity was 10.1% in Q2-24 and 16.52% for H1 2024; return on assets was 0.6% in Q2-24 and 0.99% for H1 2024.

Outlook and guidance

• CPI-linkers expected to support profitability with a 60% valuation rate for 2024; management anticipates continued growth in SME and entrepreneur lending focusing on green transformation and sustainable finance.

• De-dollarisation trend in deposits is expected to persist, with TRY deposits comprising nearly two-thirds of total deposits.

• The bank aims to maintain strong capital and liquidity positions, supporting expansion in core business lines and prioritizing investments in renewable energy and gender equality products.