Turkiye Garanti Bankasi A.S.

In the first six months of 2026, Garanti BBVA reported TRY 64 billion in net income, up 20% year over year, and a 28% return on equity. Core banking revenues grew 43% year over year, and fee income was up 39% year over year and 12% quarter over quarter; operating expenses increased 45%. Total assets reached TRY 5.2 trillion, customer deposits reached TRY 3.5 trillion, CET1 was maintained at around 12%, and the bank cited TRY 149 billion of excess capital and $6.1 billion of foreign currency liquidity buffer. Management said quarterly net income declined by a single digit due mainly to lower trading income and higher provisions, and that if CPI-linker valuation had used a 30% inflation rate instead of 27%, net income would have been close to TRY 2 billion higher. For 2026, management reiterated loan growth guidance for TL and foreign currency loans, kept full-year consolidated cost of risk guidance but said it is likely to land toward the upper end of the 2% to 2.5% range, and said margin expansion remains expected but at a slower pace than initially assumed.

Mahmut Akten framed the quarter as solid but still subject to macro and funding-rate pressure. He said the main NIM issue was the rise in the Central Bank funding rate, that the third quarter should still be relatively high-cost, and that the fourth quarter should improve as policy normalization and funding costs ease. He also emphasized fee momentum, wealth-management and transactionality as strategic growth engines, along with continued investment in customer acquisition and technology, including AI.

Atil Özus highlighted the balance sheet and capital position as strong, with total assets of TRY 5.2 trillion, deposits of TRY 3.5 trillion, a CET1 ratio around 12%, and TRY 149 billion of excess capital. He said the quarter’s lower NIM reflected higher funding costs and that, assuming a 30% CPI assumption instead of 27%, net interest income would have been around TRY 3 billion higher and year-to-date net interest margin expansion 20 bps higher. He also said the capital ratio decline in the quarter was mainly due to sub-debt amortization, while a 10% lira depreciation would cut the total capital adequacy ratio by about 15 bps and CET1 by 30 bps, and interest-rate sensitivity on capital is only 3-4 bps.

Analysts focused on deposit growth, the NIM outlook, fee and cost discipline, the Romania sale, and the risk of higher NPLs/cost of risk. Management said the deposit build was partly seasonal and actively managed, but the bigger issue was the rise in funding costs; they guided for third-quarter NIM to be roughly flat to slightly better and said fourth quarter should improve, while still seeing 75 bps full-year margin improvement as possible but not easy. On cost of risk, management said the bank still expects to stay within its 2% to 2.5% range, but toward the upper end due to consumer-credit mix, restructuring-related migration, and a higher-for-longer rate environment; for Romania, they said the sale remains on track for mid-fourth quarter and is expected to contribute about EUR 100 million-plus in net income and around 1.3% to 1.5% ROE.