Garanti BBVA increased its profit by 331 percent in 2022

Garanti BBVA increased its net profit by 331 percent compared to the previous year to TL 58.5 billion in 2022. The market expected the bank to make a profit of TL 58.3 billion in 2022. Garanti BBVA achieved a rapid increase in its net profit in 2022 that slightly exceeded expectations. According to the financial results sent by the bank to the Public Disclosure Platform (KAP), the bank made a net profit of TL 58.51 billion in 2022. The bank's profit was recorded as TL 13.60 billion in 2021. The market's expectation for 2022 was that Garanti BBVA would make a profit of TL 58.28 billion. In the last quarter of 2022, Garanti BBVA announced a net profit of TL 19.8 billion. In the 3rd quarter, the bank's net profit was TL 17.5 billion. The bank's net interest income also saw a rapid increase throughout 2022. Net interest income was TL 83.32 billion in 2022. In 2021, this item was recorded as TL 33.64 billion. Net fee and commission income also increased by 96 percent compared to the previous year, reaching TL 16.63 billion. Deposits doubled According to the 2022 results, the bank's TL loans increased by 79 percent compared to 2021, reaching TL 471.7 billion. TL deposits increased by 138 percent to TL 424.1 billion. Despite the strong profit growth the bank achieved an average return on equity at the inflation rate, as seen in the sector in general. According to the results, the bank's return on equity was 51 percent in 2022. This rate was 23.2 percent in 2021. In 2022, the core capital adequacy ratio was recorded as 14.5 percent, while the capital adequacy ratio was recorded as 16.8 percent. Excluding the TL 8 billion free provisions on the balance sheet, the capital adequacy ratio became 17.5 percent. Expecting an average return on equity of over 28 percent in 2023, Garanti BBVA announced its expectations for 2023 along with its 2022 financial results. Accordingly, annual TL loan growth in 2023 is expected to be as much as the average CPI. It is predicted that annual foreign currency loan growth in dollar terms will be flat in 2023. Forecasting a contraction of 185 basis points in core net interest margin in 2023, Garanti BBVA also announced its 2023 expectation for net credit risk cost as 100 basis points. The bank expected an average growth of net fees and commissions in 2023 as much as the CPI, while it predicted that operational expense growth would be 100 percent. Following these expectations, the bank estimated an average return on equity of over 28 percent in 2023. Baştuğ: 2022 was a challenging year for banks Evaluating the financial results, Garanti BBVA General Manager Recep Baştuğ said that 2022 was a challenging year for banks within the framework of macro policies and that competition was beyond the usual limits. Baştuğ made the following comments regarding the results: We experienced a year in which credit demand developed predominantly in Turkish Lira, not foreign currency. We maintained our leadership among private banks by increasing our share in the sector with TL credit growth in line with regulations. TL credit demand, which increased during the year due to inflation, slowed down in the last quarter due to the impact of regulations. In corporate loans, there was only a loan disbursement directed to SMEs and export companies. Other companies significantly reduced their disbursements due to the impact of the regulation. Much more important than the development on the asset side was the funding structure on the liability side. The volume of currency protected deposits (CCD) constitutes more than half of the term TL deposits in the sector. We have seen a similar trend in our bank. With this product, deposit maturities have been extended and it has supported our balance sheets by reducing the maturity mismatch, which is one of the traditional problems of the sector.