Turkey
Highlights for the period January - December 2025
- Growth in customer funds under management exceeds growth in lending activity for the year
- Improvement in net interest income thanks to dynamism of the business and greater contribution from the Turkish lira customer spread
- Significant increase in fees and lower negative hyperinflation adjustment
- Favorable evolution of the net attributable profit in the year
BUSINESS ACTIVITY (1)
(VARIATION AT CONSTANT EXCHANGE RATE COMPARED TO 31-12-24)
(1) Excluding repos.
NET INTEREST INCOME / AVERAGE TOTAL ASSETS
(PERCENTAGE AT CONSTANT EXCHANGE RATE)
OPERATING INCOME
(MILLIONS OF EUROS AT CURRENT EXCHANGE RATE)
NET ATTRIBUTABLE PROFIT (LOSS)
(MILLIONS OF EUROS AT CURRENT EXCHANGE RATE)
| FINANCIAL STATEMENTS AND RELEVANT BUSINESS INDICATORS (MILLIONS OF EUROS AND PERCENTAGE) | ||||
|---|---|---|---|---|
| Income statement | 2025 | 𝝙 % | 𝝙 % (1) | 2024 |
| Net interest income | 3,079 | 106.4 | 169.5 | 1,492 |
| Net fees and commissions | 2,123 | 0.6 | 32.3 | 2,111 |
| Net trading income | 394 | (65.6) | (55.4) | 1,145 |
| Other operating income and expenses | (384) | (28.3) | (56.2) | (535) |
| Gross income | 5,213 | 23.8 | 89.3 | 4,212 |
| Operating expenses | (2,315) | 9.7 | 41.8 | (2,111) |
| Personnel expenses | (1,311) | 6.4 | 39.7 | (1,232) |
| Other administrative expenses | (773) | 16.6 | 52.9 | (663) |
| Depreciation | (231) | 7.1 | 22.5 | (216) |
| Operating income | 2,898 | 37.9 | 158.7 | 2,101 |
| Impairment on financial assets not measured at fair value through profit or loss | (1,000) | 90.1 | 150.9 | (526) |
| Provisions or reversal of provisions and other results | (34) | n.s. | n.s. | 165 |
| Profit (loss) before tax | 1,863 | 7.1 | 115.6 | 1,741 |
| Income tax | (904) | (10.8) | 18.5 | (1,014) |
| Profit (loss) for the period | 959 | 31.9 | n.s. | 727 |
| Non-controlling interests | (154) | 32.5 | n.s. | (116) |
| Net attributable profit (loss) | 805 | 31.8 | n.s. | 611 |
| Balance sheets | 31-12-25 | 𝝙 % | 𝝙 % (1) | 31-12-24 |
| Cash, cash balances at central banks and other demand deposits | 9,061 | 2.6 | 41.0 | 8,828 |
| Financial assets designated at fair value | 5,010 | 11.2 | 52.9 | 4,503 |
| Of which: Loans and advances | 18 | n.s. | n.s. | 2 |
| Financial assets at amortized cost | 72,047 | 11.0 | 52.6 | 64,893 |
| Of which: Loans and advances to customers | 53,745 | 11.3 | 52.9 | 48,299 |
| Tangible assets | 1,905 | (7.7) | 12.5 | 2,064 |
| Other assets | 2,680 | 7.5 | 45.3 | 2,494 |
| Total assets/liabilities and equity | 90,702 | 9.6 | 50.0 | 82,782 |
| Financial liabilities held for trading and designated at fair value through profit or loss | 1,690 | (13.1) | 19.5 | 1,943 |
| Deposits from central banks and credit institutions | 3,565 | (16.5) | 14.8 | 4,267 |
| Deposits from customers | 62,984 | 8.4 | 49.0 | 58,095 |
| Debt certificates | 7,501 | 66.0 | 128.2 | 4,517 |
| Other liabilities | 5,727 | 0.2 | 31.1 | 5,714 |
| Allocated regulatory capital | 9,235 | 12.0 | 53.6 | 8,245 |
| Relevant business indicators | 31-12-25 | 𝝙 % | 𝝙 % (1) | 31-12-24 |
| Performing loans and advances to customers under management (2) | 53,080 | 10.0 | 51.2 | 48,242 |
| Non-performing loans | 2,793 | 38.5 | 90.4 | 2,016 |
| Customer deposits under management (2) | 62,535 | 8.9 | 49.6 | 57,443 |
| Off-balance sheet funds (3) | 26,290 | 45.4 | 99.9 | 18,076 |
| Risk-weighted assets | 71,398 | 10.1 | 50.8 | 64,821 |
| RORWA (4) | 1.36 | 1.17 | ||
| Efficiency ratio (%) | 44.4 | 50.1 | ||
| NPL ratio (%) | 3.9 | 3.1 | ||
| NPL coverage ratio (%) | 76 | 96 | ||
| Cost of risk (%) | 1.94 | 1.27 | ||
| (1) At constant exchange rate. (2) Excluding repos. (3) Includes mutual funds and pension funds. (4) For more information on the calculation methodology, as well as the calculation of the metric at the consolidated Group level, see Alternative Performance Measures at this report. |
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Macro and industry trends
Economic activity maintained its dynamism during the third quarter of 2025 thanks to strong domestic demand, which, combined with looser monetary conditions, a relatively more favorable global environment, and neutral fiscal policy, keeps growth expectations positive for the coming quarters. According to BBVA Research, GDP growth could reach 3.7% in 2025, in line with the previous scenario, and reach 4% in 2026. Meanwhile, inflation has continued to moderate during the last months of 2025 at a slightly higher pace than anticipated, standing at 30.9% in December. This has allowed the central bank to continue with gradual interest rate cuts to 38% by the end of 2025. By 2026, inflation and interest rates are expected to continue falling, ending the year at 25% and 32%, respectively.
The Turkish banking system continues to be affected by the impact of inflation. The total volume of credit in the system increased by 42.2% year-on-year at the end of November 2025, similar to the previous months. The stock of credit continues to be driven by consumer credit and credit card portfolios (+48.0% year-on-year) and by corporate lending (+40.3% year-on-year). Total deposits maintained the strength of recent months and grew by 41.8% year-on-year at the end of November 2025, with greater growth in dollar deposits (+53.0%) than in lira deposits (+35.9%). Dollarization of the system increased slightly to 37.3% in November 2025, from 34.6% a year earlier. The system's NPL ratio remains well under control and stood at 2.63% in November 2025. The capital indicators remained at comfortable levels at the same date.
Unless expressly stated otherwise, all comments below on rates of changes for both activity and results will be presented at constant exchange rates. These rates, together with changes at current exchange rates, can be observed in the attached tables of the financial statements and relevant business indicators. For the conversion of these figures, the end of period exchange rate as of December 31, 2025 is used, reflecting the considerable depreciation by the Turkish lira in the last twelve months. Likewise, the balance sheet, Risk-Weighted Assets (RWA) and the equity are affected.
Activity14
The most relevant aspects related to the area's activity during 2025 were:
Lending activity (performing loans under management) recorded an increase of 51.2% between January and December 2025, mainly driven by the growth in Turkish lira loans (+44.5%). This growth was mainly driven by the performance of credit cards and consumer loans and, to a lesser extent, loans to businesses. Foreign currency loans (in U.S. dollars) increased by 18.1%, boosted by the increase in activity with customers focused on foreign trade (with natural hedging of exchange rate risk).
Customer deposits (69.4% of the area's total liabilities as of December 31, 2025) remained the main source of funding for the balance sheet and increased by 49.6% favored by the positive performance of Turkish lira time deposits (+36.4%), which represent a 82.2% of total customer deposits in local currency. Balances deposited in foreign currency (in U.S. dollars) increased by 34.8%, driven by the demand deposits +26.6%. Thus, as of December 31, 2025, Turkish lira deposits accounted for 62.6% of total customer deposits in the area. For its part, off-balance sheet funds grew by 99.9%.
The most relevant aspects related to the area’s activity in the fourth quarter of 2025 were:
Lending activity (performing loans under management) increased by 9.6%, mainly driven by the growth in Turkish lira loans (+10.9%, above the quarterly inflation rate, which stood at 4.4%). Within Turkish lira loans, credit cards and consumer loans continued to drive growth, which grew at rates of 11.4% and 16.6%, respectively. Growth in foreign currency loans slowed slightly and stood at 2.7%.
In terms of asset quality, the NPL ratio increased by 20 basis points compared to the figure as of the end of September to 3.9%, mainly as a result of the increase in non-performing loans, in the retail portfolios, partially offset by sales of impaired loans and recoveries. On the other hand, the NPL coverage ratio recorded a decrease of 204 basis points in the quarter due to the increase of non-performing loans and provisions releases originated in a particular customer in the wholesale portfolio, standing at 76% as of December 31, 2025.
In the evolution of customer funds during the quarter, off-balance sheet funds stood out, which recorded a growth of 14.7%. On the other hand, customer deposits increased by 8.4% with higher balances in both, U.S. dollar deposits (+7.3%, driven by demand deposits), and, mainly, Turkish lira balances (+9.2%, driven by time deposits).
Results
Turkey reached a net attributable profit of €805m during 2025, which compares very favorably with the result achieved in the same period of the previous year, as a result of the good performance of recurring revenues in banking business (net interest income and net fees and commissions) and a less negative hyperinflation impact.
As mentioned above, the year-on-year comparison of the accumulated income statement at the end of December 2025 at current exchange rate is affected by the depreciation of the Turkish lira in the last year (-27.2%), with a less pronounced drop in the fourth quarter (-3.3%). To isolate this effect, the highlights of the results of 2025 at constant exchange rates are summarized below:
Net interest income grew year-on-year, mainly driven by the dynamism of lending activity and by the improvement of the Turkish lira customer spread. In addition, the central bank has increased the remuneration of certain Turkish lira reserves since February 2024. The aforementioned was partially offset by the higher wholesale-funding costs issued by Garanti BBVA in financial year 2025.
Net fees and commissions recorded a significant increase, driven by the solid performance in fees and commissions associated with payment methods, followed by those related to asset management, insurances, guarantees and brokerage activity, which compensated the increase in fees paid for payroll acquisitions.
Lower NTI, due to the currency positions maintained in the area.
The other operating income and expenses line had a balance of €-384m, which compares favorably with the previous year. This line incorporates, among others, the loss on the net monetary position, together with its partial offset by the income derived from inflation-linked bonds (CPI linkers). The net impact of both effects was less negative at the end of December 2025, compared with the same period of 2024. This line also includes results from certain subsidiaries of Garanti BBVA and the evolution of the insurance business, whose contribution was increased in both cases compared to the cumulative total at the end of December 2024.
Operating expenses continued growing, mainly due to higher personnel expenses, linked to the growth in the workforce and a salary review in the context of high inflation. On the other hand, operating expenses also increased, highlighting the higher advertising expenditures and technology expenses.
Regarding the impairment on financial assets, higher provisions were recorded, which is explained by the growth of the activity and higher requirements in retail portfolios. Meanwhile, the cumulative cost of risk as of December 31, 2025 stood at 1.94%, with an increase of 18 basis points in the quarter.
The provisions and other results line closed December 2025 at €-34m, reflecting an unfavorable evolution compared with the releases recorded in the same period of the previous year (€165m), which in 2024 were mainly associated with significant recoveries from wholesale clients and the revaluation of real estate assets.
In the fourth quarter of 2025, the net attributable profit of Turkey stood at €201m, which represents a decrease compared to the previous quarter mainly as a result of higher operating expenses along with an increase in the level of impairment on financial assets. This was partially offset by improved net interest income and a less negative hyperinflation adjustment compared to the previous quarter as a result of a lower quarterly inflation rate.
14 The variation rates of loans in Turkish lira and loans in foreign currency (U.S. dollars) are calculated based on local activity data and refer only refer to Garanti Bank and therefore exclude the subsidiaries of Garanti BBVA, mainly in Romania and Netherlands.
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