Türkiye Halk Bankasi (HALKB) Q4 2024 earnings summary

Executive summary

• Achieved strong financial performance in 2024, with total assets reaching up to TRY 3.14 trillion, a 37% year-over-year increase, and a focus on Turkish lira dominance and capital buffer management in a volatile environment.

• Net profit rose 31% to TRY 23.2 billion, with net income in Q4 at TRY 3.9 billion, and ROE improving to 14.8% YtD.

• Issued a TRY 26 billion Tier 2 bond and other subordinated debt to strengthen capital structure and support future growth.

• Advanced digital transformation and sustainability initiatives, including approval for a digital participation bank and a renewable energy subsidiary.

• The independent auditor issued a qualified opinion due to the classification of certain government bonds, which, if adjusted, would reduce total assets and equity by TRY 6.3 billion.

Financial highlights

• Total assets surpassed TRY 3 trillion, with growth of 37% YoY and 4.6% QoQ; net loans increased to TRY 1.49 trillion.

• Net interest income reached TRY 43.1 billion, with NII up 32% QoQ in Q4 and NIM improving to 2.9% (swap adjusted).

• Net fees and commissions income rose 108% YoY, reaching TRY 41.7 billion.

• Operating expenses increased 43% YoY but remained below inflation; cost/income ratio at 42.5% in Q4.

• Dividend per share for 2024 is TRY 2.10, pending approval.

Outlook and guidance

• Forecasting mid-20s total loan growth, low-20s TL loan growth, high single-digit FX loan growth in USD terms for 2025.

• Targeting NIM of 4% or higher by 2025, with exit NIM at 5.5%, and projecting 90% net fees and commissions growth.

• Management expects continued growth in SME and retail lending, with a focus on maintaining strong liquidity and capital positions.

• No inflation accounting will be applied in 2025 per BRSA decision.

• Year-end inflation expected in the mid-20s, policy rate forecast at 25%.