İşbank’s profits exceed expectations

İşbank

İşbank posted a net profit of TL 21.4 billion in Q4, above market expectations of TL 17.3 billion.

İşbank announced its solo balance sheet for the 4th quarter of 2023.

Accordingly, the bank’s net profit was 20.5 billion TL in the previous quarter and its total annual profit was 72.2 billion TL, increasing its profit by 17 percent annually compared to last year. In the whole of 2022, the bank’s net profit was 61.5 billion TL.

The asset size of Türkiye İş Bankası reached TL 2.5 trillion at the end of 2023. While the bank maintained its position as Turkey’s largest private bank, its capital adequacy ratio was realized as 21.6 percent.

At the end of the fourth quarter of this year, Isbank’s average return on equity was 33.3 percent. The Bank’s target for the end of 2023 was to maintain the return on equity ratio at the level of 30 percent, and the return on equity exceeded the target.

Return on equity calculated as 38.6 percent

Adjusted for the bank’s free provision balance of TL 10 billion, the return on equity at the end of 2023 was calculated as 38.6 percent. In nine months of the year, this ratio was 36.8 percent.

The bank’s return on average assets was 3.80 percent, while the 2023 adjusted return on equity was 4.5 percent.

The bank’s net interest income including swap costs was 50.3 billion TL, while the net interest margin for 2023 was 3.5 percent. Net interest income including swap costs fell 53.4 percent quarter-on-quarter and 20.9 percent year-on-year.

The Bank’s target for the end of 2023 was to maintain the net interest margin at 5 percent, and the increasing pressure in the monetary and quantitative tightening environment seems to be effective in suppressing this margin.

Loans grew by 15.5 percent in the last quarter

The bank’s deposits grew by 13.9 percent quarter-on-quarter in the fourth quarter and loans grew by 15.5 percent in the same period.

The total securities of the bank, which was 278.3 billion TL at the end of 2022, reached 413.4 billion TL at the end of 2023 nine months. By the end of 2023, total securities grew by 14.3 percent to reach TL 472.4 billion.

TL-based securities accounted for approximately 72.9 percent of total securities. Approximately TL 128 billion of TL securities were CPI-indexed securities.

Strong increase in fees and commissions

Net fees and commissions remained very strong in this quarter as well. In the fourth quarter of 2023, it increased by 40.9 percent quarter-on-quarter to approximately TL 16.8 billion, and by 162.8 percent year-on-year to TL 42.4 billion. The Bank’s non-performing loan ratio for 2023 was realized as 2.1 percent.

According to solo figures, the bank’s core capital ratio and tier 1 capital ratio were 18.4 percent, while the capital adequacy ratio was 21.6 percent.

The Bank also shared its expectations for 2024; accordingly, 50 percent loan growth and a net interest margin of 4 percent were targeted in line with the targets. The Bank determined the increase in the non-performing loan ratio at 2 percent and the increase in operating expenses at the average inflation level; return on equity at 35 percent.

Aran: We will continue to support the national economy in the second century

Commenting on the year-end financial results for 2023, Hakan Aran, CEO of İşbank, stated that this year they will celebrate their 100th anniversary with enthusiasm and excitement.

Mr. Aran said, “As we move into our second century, we will continue to support the national economy with the awareness of the responsibility of being a pioneering and leading bank by aiming to create sustainable and long-term value; we will also continue to contribute to education, sports, science, environment and culture and arts.”

The amount of resources provided by İşbank to the economy increased to TL 1.6 trillion by the end of 2023, of which TL 1.2 trillion was in cash and TL 427.3 billion in non-cash loans. With these figures, the Bank maintained its position as the private bank making the largest contribution to the national economy.

While total deposit volume reached TL 1.6 trillion by the end of 2023, the volume of Turkish Lira deposits increased by 128.1 percent compared to the end of 2022 and reached TL 880.6 billion.

Source: BURCU KIRATLI/BLOOMBERG HT

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