Türkiye Sinai Kalkinma Bankasi A.S.

TSKB reported 2025 quarterly net income of TRY 2.1 billion and full-year net income of TRY 11.4 billion, up 12% year over year. Annualized net interest margin was 5.6% versus 5.0% guidance, ROE was 29.3%, the cost-to-income ratio was 17.1%, NPL ratio was 2.4%, problematic loans were 9.6% of the portfolio, and currency-adjusted net cost of risk was 55 bps. Capital ratios at year-end were 20.3% CAR and 19.2% Tier 1 excluding temporary BRSA measures. For 2026, management guided to low-teen real loan growth, 4.5% NIM, around 25% ROE, approximately 19% CAR and 18% Tier 1, a 2.5% NPL ratio, and 50 bps net cost of risk. They also said guidance includes gradual free provision reversals in 2026, and they expect at least 50% growth in corporate finance fees off a low base.

Management framed 2025 as a year of disciplined execution on TSKB’s development-finance strategy, with loan growth, profitability and capital all broadly landing in line with or above guidance. The tone was confident but measured: they repeatedly emphasized a “cautiously optimistic” approach, said 2026 should still deliver low-teen growth, and highlighted the bank’s focus on sustainable lending, climate finance, and capital-efficient expansion. They also stressed that the business model remains differentiated versus peers because of long-term nondeposit funding and a large share of development-oriented projects.

The financial commentary focused on strong top-line generation and unusually high profitability supported by NII, securities income, collections, and provision reversals. Management said NII, including swap cost, rose 22% year over year in the quarter and 7% quarter over quarter, while CPI linker income was TRY 844 million in the quarter and TRY 3 billion for the year; total free provision reversals reached TRY 950 million in 2025, with TRY 1.1 billion still left as a buffer. They also highlighted liquidity and funding strength, including total funding of $1.8 billion, record DFI funding of $1.1 billion, and an FX LCR of about 58%. On capital, they said year-end CAR was 20.3% and Tier 1 was 19.2% excluding temporary measures, and that the 2026 plan still leaves capital comfortably above regulatory levels.

The main Q&A issues were whether 2026 ROE guidance includes free provision reversals, what was driving trading gains, whether recent regulatory changes restrict loan growth, and whether defense-sector lending is in the bank’s mandate. Management confirmed that 2026 guidance does include gradual free provision reversals, explained that trading gains were helped by Turkey Green Fund investments and FX revaluation, and said the bank is effectively insulated from loan-growth restrictions because of its investment-loan and DFI-backed model. On defense, they said it is not part of their mission and not a priority area in their sustainable-development mandate.