The İş Bank announced higher-than-expected profits in the third quarter of the year

İşbank

The İş Bank announced a net period profit of 20.5 billion TL, surpassing the market expectation of 19 billion TL in the third quarter of the year.

İş Bank released its third quarter solo balance sheet for 2023.

According to the report, the bank’s net profit in the previous quarter was 18.6 billion TL, while the total profit in the same period last year was at the level of 31.3 billion TL. The net profit for the entire year of 2022 was 61.5 billion TL.

At the end of the third quarter of this year, İş Bank achieved a return on equity of 38.2%. At the close of 2022, this ratio stood at 46.8%. The bank’s target for the end of 2023 is to maintain the return on equity ratio in the 30% range.

The inflation-adjusted return on equity for the end of 2022 was estimated at around the highest rate among similar banks, at approximately 20%.

The bank’s asset profitability for this quarter was 3.96%, and the tangible asset profitability was at 4.05%. Adjusted for the 6.5 billion TL reserve balance, the return on equity as of September 2023 was calculated at 36.8%. In the first six months of the year, this ratio was at 33.6%.

Loans saw a 5% increase in this period. The bank’s net interest income, including swap costs, saw a yearly increase of 2.2% compared to the first half of last year, reaching 44.6 billion TL. However, the adjusted net interest margin fell from 4.3% in the previous quarter to 3.2% in this last quarter. The cumulative net interest margin for the year stood at 4.4%, with a TÜFEX impact of 2.2%. The bank aims to maintain the net interest margin around 5% by the end of 2023.

Deposits in the third quarter grew by 15.4% quarter-on-quarter, while loans grew by 5.1% in the same period.

The bank’s total securities, which were at the level of 278.3 billion TL at the end of 2022, were approximately 369.4 billion TL by the end of June and reached around 413.4 billion TL at the end of nine months, marking a growth of approximately 12%. Around 75.2% of the securities were in TL, with about 125 billion TL in inflation-indexed securities.

In the third quarter of this year, net fees and commissions increased by approximately 60.2% quarter-on-quarter, reaching around 12 billion TL. The bank’s non-performing loan ratio in the third quarter stood at 1.9%.

According to the bank’s solo figures, the core capital ratio and the main capital ratio were 18.9%, while the capital adequacy ratio stood at 20.9%.

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