Q3 2024 Turkiye Vakiflar Bankasi TAO Earnings Call Transcript
Key Points
- Turkiye Vakiflar Bankasi TAO achieved a significant milestone by surpassing a total asset size of $100 billion for the first time in its 70-year history.
- The bank reported a quarterly net income of TRY8 billion, marking a 12% increase compared to the previous quarter, and a 81% increase in nine-month cumulative net income year-over-year.
- Strong performance in core banking revenues, with a 125% annual growth in net interest income and net fee and commission income.
- The bank's net commission income showed robust growth, with an annual increase of over 100%, contributing to a fee to OpEx ratio of 65%, one of the highest in the last decade.
- Turkiye Vakiflar Bankasi TAO maintained a strong position in international funding, raising almost $9 billion through wholesale borrowing activities, including a successful $500 million sustainable Eurobond issue.
- The bank's NPL (Non-Performing Loan) ratio increased to 1.8%, aligning with the sector average but reflecting a 30 basis point increase from the previous quarter, primarily due to retail and credit card inflows.
- Despite improvements, the bank's net interest margin remained flat at 3% compared to the previous quarter, with a significant reliance on CPI-linked securities for future margin improvements.
- The bank's residential mortgage portfolio contracted, indicating a lack of appetite compared to private peers who showed growth in this area.
- Turkiye Vakiflar Bankasi TAO revised its full-year ROE (Return on Equity) guidance downward to the low 20s from the previous 30% due to limited recovery in net interest margin.
- The bank anticipates a substantial decline in interest income from securities in the first quarter of 2025 due to a lower CPI estimate, which may impact net interest margin negatively.
Good day, ladies and gentlemen, welcome to Vakiflar Bankasi Audio Webcast third quarter, 2024 bank only earnings results. (Operator Instructions) They are Mr Ali Tahan , the head of International Banking and Investor Relations at Vakiflar Bankasi and Mrs Zeynep Nihan Dincel, who is the head of Investor Relations at Vakiflar Bankasi speakers over to you.
Thank you all. Good afternoon, everybody and welcome to Vakiflar Bankasi third quarter Tant for own presentation. As usual, we will start with the presentation and to save time and to use the time effectively, we will skip some flight and we will focus on some important highlights starting with the earnings and profitability on pahge 2 this quarter. In line with the market consensus, our quarterly net income came at TRY8 billion to which is 12% up Q on Q compared to TRY7.2 billion to in the second quarter. And that TRY8 billion talks co net income brought nine month cumulative net income number to TRY27.2 billion to which is up by 81% compared to
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