Türkiye Halk Bankasi (HALKB) Q4 2024 earnings summary

Executive summary

• Achieved solid financial performance in 2024, with total assets growing 4.6% QoQ and 37% YoY to TRY 3,008 billion, driven by securities portfolio expansion and Turkish lira dominance.

• Issued a TRY 26 billion Tier 2 bond 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; active digital banking customers increased 3% YoY to 6.5 million.

• Net interest income rose 32.2% QoQ in Q4-24, supported by efficient loan repricing and higher CPI-linker returns.

• Operating expenses grew below inflation, with cost/income ratio at 42.5% in Q4-24.

Financial highlights

• Net loans increased 16.1% YoY to TRY 1,419 billion; total deposits up 27.2% YoY to TRY 2,382 billion.

• Net income reached TRY 3.9 billion in Q4, up 31.4% sequentially; ROE at 14.8% YtD.

• NII increased by 32% quarter-on-quarter; headline NIM improved to 2.9% in Q4-24 (swap adjusted).

• Net fees and commissions rose 108% YoY, reaching TRY 10,963 million in Q4-24.

• Operating revenues grew 134.8% YoY.

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%.

• Projecting 90% net fees and commissions growth, 50% increase in OpEx, NPL ratio below 3%, gross cost of risk about 200 bps, and ROE in the mid-20s.

• TRY-dominated asset mix and core spread expansion signal earnings growth momentum for 2025.

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