Turkiye Garanti Bankasi A.S.

Garanti BBVA reported TRY 64 billion in net income for the first 6 months of 2026, up 20% year over year, and a 28% return on equity. Core banking revenues grew 43% year over year, fee income was up 39% year over year and 12% quarter over quarter, and operating expenses were up 45%. Total assets reached TRY 5.2 trillion, customer deposits were TRY 3.5 trillion, and CET1 was around 12% with TRY 149 billion of excess capital. On the margin side, management said second-quarter net interest income fell 5% quarter over quarter, while assuming a 30% CPI rate would have made net income about TRY 2 billion higher and NII about TRY 3 billion higher; year-to-date NIM expansion would have been 20 bps higher. For 2026, management maintained loan growth guidance for both TL and foreign currency loans, said full-year consolidated cost of risk should stay within the guided 2% to 2.5% range but toward the upper end, and said margin expansion is still expected this year though at a more modest pace than initially anticipated.

Mahmut Akten said the main driver of the quarter’s NIM pressure was the higher funding cost environment after the policy-rate/funding-rate increase, not deposit growth alone. He emphasized that the bank is actively managing deposits, funding duration, onshore/offshore swaps, and liquidity, and said third-quarter NIM could be similar to the second quarter, with more improvement expected in the fourth quarter. On strategy, he highlighted strong fee momentum, especially in payments, insurance, brokerage, securities, and wealth management, and framed these as important contributors to ROE and capital-light growth.

Atil Özus said capital remained strong despite a limited second-quarter decline in CAR due to sub-debt amortization, noting that internal capital generation covered RWA growth and that ratios should improve in the second half. He gave sensitivity figures of about 15 bps impact on total capital adequacy and 30 bps on CET1 for a 10% TRY depreciation, while interest-rate sensitivity on capital is only 3 to 4 bps because of the low AFS securities share. On the Romania sale, he said the process is on track to close in the fourth quarter, with prior expectations of over EUR 100 million of net income impact, over 80 bps capital impact, and about 1.3% to 1.5% ROE contribution.

Analysts focused on whether higher TL deposit balances were a deliberate liquidity move or a regulatory effect, and whether NIM pressure might reverse later in the year. Management said the bigger issue was the higher cost of funding after the policy/funding-rate increase, that third-quarter NIM may be flat or only slightly better, and that fourth quarter looks stronger if funding costs continue to normalize. Questions also centered on cost of risk and July NPLs; management said the bank still expects to stay within the 2% to 2.5% range, but toward the upper end, and explained that recent restructuring rules are pushing some NPL formation from one quarter into the next. In written Q&A, management said July NPL flow would be slightly worse than 2Q because of restructuring-related migration, but they do not see major product deterioration in vintages.