Q2 2024 Turkiye Garanti Bankasi AS Earnings Call Transcript
Key Points
- Turkiye Garanti Bankasi AS (IST:GARAN) reported a 32% year-on-year growth in earnings, reaching TRY 44.6 billion in the first half of 2024.
- The bank achieved a robust 27% growth in Turkish lira loans in the first half of the year, maintaining leadership in Turkish lira lending.
- Core banking revenue grew by 63% year-on-year, driven by a customer-focused approach and strong performance in net interest income and net fees and commissions.
- The bank's net interest margin guidance remains stable, with expectations of improvement in the second half of the year.
- Turkiye Garanti Bankasi AS maintains a strong capital position, with a consolidated capital-ex ratio of 15.2% and core equity Tier 1 of 12.8%, well above regulatory requirements.
- The bank experienced a significant increase in Stage 2 loans, with a TRY 18.5 billion rise largely due to small ticket size retail and credit card loans.
- Net NPL inflows suggest a deterioration, with a notable increase in retail and credit card portfolio NPLs.
- Despite strong earnings, the bank's capital generation could not fully offset the negative effects of market and credit risk.
- The cost of risk is expected to rise, with guidance indicating an increase to 125 basis points for the year.
- Swap costs have increased significantly quarter-on-quarter, impacting overall financial performance.
Hello, and thank you for joining us in Garanti BBVA's First Half 2024 Financial Results Webcast. Our CEO, Mr. Recep Bastug; our CFO, Mr. Aydin Guler, and our Investor Relations Director, Ms. Handan Saygin, will be presenting today. (Operator Instructions) The presentation will now start, so I leave the floor to our presenters.
Good afternoon, everyone. We're very pleased to be with you all on another earnings call presenting our stellar results. Despite the market complexities and challenges of the first half, we continued to deliver improvement in banking performance. Before getting into our financial performance details, let's as usual, go over the broader macroeconomic environment we're in.
We now cast annual 4% GDP growth in the second quarter. Accordingly, we expect almost no change quarter-on-quarter. This will likely take the annual GDP growth in first half '24 closer to 5%. Taking into account the strong performance of first half, there seems to be upside for our 2024 GDP
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