Türkiye Vakiflar Bankasi Türk Anonim Ortakligi

VakifBank reported Q4 2025 net income of TRY 28.1 billion and full-year 2025 net income of TRY 70.1 billion, up 73% from TRY 40.4 billion in 2024. Excluding TRY 4 billion of free provisioning in the quarter, Q4 net income would have been TRY 32.1 billion, up 170% quarter over quarter. Reported quarterly average ROAE was above 38%, and full-year average ROAE was almost 26%. Reported quarterly net interest margin was 6.0%, with swap-adjusted quarterly NIM at 5.4% versus 3.0% a quarter earlier, and full-year swap-adjusted NIM rose to 3.4% from 2.3%. Fee income was TRY 19.4 billion in Q4 and nearly TRY 73 billion for 2025, up 56% year over year. Full-year OpEx was TRY 118 billion, up 61%, with a cost/income ratio of 40% versus a sector average of 41%. On lending, SME loans grew 15% quarter over quarter and 62% for the full year; retail lending was up 8% quarter over quarter and 44% for the full year; FX lending grew 5.7% in dollar terms in Q4 and about 25% for the year. Deposits rose 26% year over year, and demand deposits exceeded TRY 1.1 trillion. Asset quality ended with an NPL ratio of 2.9%, Stage II at 9.0%, full-year net cost of risk at 128 bps, and TRY 8 billion of free provisioning remaining on the balance sheet. Reported CET1/Tier 1/total CAR were 11.4%/14.4%/16.7%, versus 10.0%/12.3%/14.7% a quarter earlier; management said bank-only CET1 without forbearance was around 10% at year-end. For 2026, management guided TL loan growth at mid-20s, FX loan growth in single digits, swap-adjusted NIM around 4.5%, fee income growth above 40%, OpEx growth above inflation, and net cost of risk around 150 bps.

Ali Tahan framed Q4 as a very strong quarter delivered as guided, emphasizing that VakifBank closed 2025 “at the top” on profitability and margin. He highlighted the 2.4 percentage point quarterly expansion in swap-adjusted NIM, driven by CPI-linked income and TL core spread expansion, and said the bank is entering 2026 from a strong base. His tone was confident and constructive, with repeated emphasis on peer-leading performance, funding diversity, and a better margin setup for next year.

Management said the 2025 P&L was supported by TRY 4 billion of free provisioning in Q4 and TRY 8 billion still outstanding on the balance sheet. On funding and capital, it cited more than $12.8 billion of international funding in 2025, including $1.7 billion via DPR, a $500 million AT1 at an 8.2% yield, and upcoming IBRD and AIIB transactions. Reported capital ratios improved to CET1 11.4%, Tier 1 14.4%, and total CAR 16.7%, with quarter-over-quarter gains attributed to profitability, mark-to-market gains on subsidiaries and real estate, and the AT1 issuance; the bank also said the bank-only CET1 ratio without forbearance was around 10% at year-end. For 2026, he said free provisions are assumed unchanged, OpEx will be above inflation and likely above 30% because of branch expansion and IT spending, and wholesale funding will favor longer-duration IFI and DPR transactions.

Analysts focused on the macro assumptions behind 2026 guidance, especially inflation and policy rates, the relatively conservative TL loan growth outlook, and the NIM path through the year. Management said it is using the government’s OVP assumptions except for inflation, where it relies on Central Bank market expectations in the mid-20s, and it expects 800 bps of rate cuts in 2026, taking the policy rate to around 30% by year-end, with most cuts in the first half. On loans, management said the mid-20s TL growth guide is a conservative starting point and that it does not want to lose market share, especially in non-retail, while retail growth had lagged because private banks were aggressive. For NIM, management said the key assumption is that policy rate cuts fully pass through to deposit rates, and quarterly NIM should peak in Q2 or Q3 before easing in Q4.