• Growth in activity, again driven by loans and deposits in Turkish lira
  • Lower hyperinflation adjustment in the quarter
  • Strength of risk indicators
  • Year-on-year growth in net attributable profit

Business activity (1)

(1) Excluding repos.

Net interest income / AVERAGE TOTAL ASSETS
(Percentage at Constant exchange rate)

Operating income
(Millions of euros at constant exchange rate)

(1) At current exchange rate: -6.7%.

Net attributable profit (LOSS)
(Millions of euros at constant exchange rate)

(1) At current exchange rate: -42.3%.

Financial statements and relevant business indicators (Millions of euros and percentage)

Income statement Jan.-Sep. 22 ∆% ∆% (1) Jan.-Sep. 21(2)
Net interest income 1,976 19.7 122.9 1,651
Net fees and commissions 452 2.1 90.1 443
Net trading income 591 147.6 n.s. 239
Other operating income and expenses (662) n.s. n.s. 81
Gross income 2,357 (2.3) 81.9 2,414
Operating expenses (790) 7.5 100.3 (735)
Personnel expenses (454) 7.7 100.6 (421)
Other administrative expenses (240) 9.7 104.3 (219)
Depreciation (96) 1.6 89.2 (95)
Operating income 1,567 (6.7) 73.8 1,679
Impairment on financial assets not measured at fair value through profit or loss (285) 21.2 125.8 (235)
Provisions or reversal of provisions and other results (71) n.s. n.s. 59
Profit (loss) before tax 1,211 (19.4) 50.1 1,503
Income tax (891) 176.3 n.s. (323)
Profit (loss) for the period 320 (72.9) (49.6) 1,180
Non-controlling interests 17 n.s. n.s. (598)
Net attributable profit (loss) 336 (42.3) 7.4 583
  • (1)At constant exchange rate.
  • (2) Restated balances due to reallocation of some technology expenses. For more information, please refer to the “Business Areas” section.
Balance sheets 30-09-22 ∆% ∆% (1) 31-12-21
Cash, cash balances at central banks and other demand deposits 8,110 4.5 24.0 7,764
Financial assets designated at fair value 5,558 5.1 24.7 5,289
Of which: loans and advances - - - 295
Financial assets at amortized cost 52,000 25.2 48.6 41,544
Of which: loans and advances to customers 36,898 17.5 39.4 31,414
Tangible assets 960 54.1 82.9 623
Other assets 1,776 73.4 105.8 1,025
Total assets/liabilities and equity 68,404 21.6 44.4 56,245
Financial liabilities held for trading and designated at fair value through profit or loss 2,418 6.4 26.4 2,272
Deposits from central banks and credit institutions 3,999 (2.1) 16.2 4,087
Deposits from customers 47,198 23.1 46.1 38,341
Debt certificates 3,379 (6.6) 10.9 3,618
Other liabilities 4,850 123.9 165.8 2,166
Regulatory capital allocated 6,561 13.9 35.2 5,761
Relevant business indicators 30-09-22 ∆% ∆% (1) 31-12-21
Performing loans and advances to customers under management (2) 36,515 19.3 41.6 30,610
Non-performing loans 2,822 (5.8) 11.8 2,995
Customer deposits under management (2) 47,195 23.1 46.2 38,335
Off-balance sheet funds (3) 5,571 43.0 69.8 3,895
Risk-weighted assets 53,435 7.5 27.6 49,718
Efficiency ratio (%) 33.5 29.5
NPL ratio (%) 5.6 7.1
NPL coverage ratio (%) 86 75
Cost of risk (%) 0.89 1.33
  • (1) At constant exchange rate.
  • (2) Excluding repos.
  • (3) Includes mutual funds and pension funds.

Macro and industry trends

Despite the complex local and global macroeconomic environment, economic activity has been stronger than expected in the first half of the year. According to BBVA Research’s estimates, the resilience in activity could lead to growth of 6.0% in 2022. This figure is significantly higher than the 5.0% forecast 3 months ago. Moreover, the relative strength of demand, high commodity prices and the sharp depreciation of the Turkish lira in a context of negative interest rates in real terms (further after the recently announced interest rate cuts by the central bank) have contributed to an inflationary spike, with annual inflation reaching 83.5% in September 2022. According to BBVA Research's estimates, growth could slow down to 3.5% in 2023, therefore reducing inflationary pressure and improving the external balances. However, the economic environment remains highly unstable due to the combination of high inflation, very low real interest rates, pressure on the Turkish lira, high external funding needs and the current global context.

Total credit volumes in the banking system increased by 70.4% year-on-year in local currency terms as of August 2022 (+63.9% growth in the Turkish lira portfolio and +82.3% growth in the foreign currency credit portfolio). Meanwhile, deposits grew by 97.8%, adjusted, these growth rates, for both inflation and the depreciation of the Turkish lira. The system's NPL ratio stood at 2.38% in August 2022 (3.67% in July 2021 and 3.16% at the end of 2021).

Unless expressly stated otherwise, all comments below on rates of changes for both activity and income, will be presented at constant exchange rates. For the conversion of these figures, the exchange rate as of September 30, 2022 is used. These rates, together with changes at current exchange rates, can be observed in the attached tables of the financial statements and relevant business indicators.


The most relevant aspects related to the area’s activity during the first nine months of 2022 were:

  • Lending activity (performing loans under management) increased by 41.6% between January and September 2022, driven by the growth in Turkish lira loans (+55.6%). This growth was mainly supported by commercial loans and, to a lesser extent, credit cards and consumer loans. Regarding foreign currency loans (in U.S. dollars) deleveraging continues (-16.9%).
  • Customer deposits under management (69% of the area's total liabilities as of September 30, 2022) remained the main source of funding for the balance sheet and increased by 46.2%. Especially noteworthy is the positive performance of Turkish lira time deposits (+87.8%), which represent a 72.4% of total customer deposits in local currency, as well as demand deposits (+77.8%). Balances deposited in foreign currency (in U.S. dollars) continued their downward path and decreased by 10.8%. For its part, off-balance sheet funds grew by 69.8%.

The most relevant of the evolution of the area's activity in the second quarter of 2022 has been:

  • Lending activity was above the previous quarter (+8.4%), with a positive evolution of the Turkish lira loans, highlighting corporates (+14.6%), credit cards (+27.4%) and consumer loans (+9.7%).
  • In terms of asset quality, the NPL ratio decreased by 32 basis points compared to the rate reached at the end of June 2022 to 5.6%, due to the increase in loans in Turkish lira, together with a slight decline in NPL balance, where recoveries have offset new inflows. The NPL coverage ratio improved to 86% as of September 30, 2022.
  • Total funds under management showed a positive quarterly evolution (+15.7%), highlighting the growth of time deposits (+24.1%) and the dynamism of demand deposits (+22.2%), in local currency, as well as the growth of off-balance sheet funds (+18.1%).


Turkey generated a net attributable profit of €336m between January and September 2022. This result includes the application of hyperinflation accounting in Turkey, with effect from January 1, 2022 which includes, among others, the loss of the net monetary position for a gross amount of €2,070m, partially offset by the gross impact of income from inflation-linked bonds (CPI linkers) of €1,351m, both recorded in the "Other operating income and expenses" line, as well as the impact of applying the period-end exchange rate as of September 30, 2022. These results are not comparable with those from the first nine months of 2021, as accounting for hyperinflation has been applied since January 1, 2022.

The most significant aspects of quarterly evolution in the area's income statement were:

  • Net interest income recorded significant growth (+27.7%), due to higher Turkish lira loan volumes and the improvement in customer spread.
  • Net fees and commissions increased by 3.0%, mainly driven by the positive performance in payment systems, money transfers and brokerage activity.
  • Income from NTI was below the previous quarter (-5.1%), mainly due to lower gains from derivatives transactions, as well as to a lower currency position.
  • Other operating income and expenses line includes, among others, the aforementioned loss in the value of the net monetary position due to the country's inflation rate, which was lower than that of the previous quarter. It should be noted that said loss is partially offset by the income derived from inflation-linked bonds (CPI linkers), which were lower between July and September, in relation to those obtained in the first quarter of 2022. Despite the above, there has been a greater contribution to the Deposit Guarantee Fund and higher income from the subsidiaries of Garanti BBVA.
  • Operating expenses increased (+16.4%), mainly due to higher personnel expenses.
  • Regarding the impairment on financial assets, they increased by 52.3% mainly due to the increase in coverage for individual clients that are sensitive to the depreciation of the Turkish lira, and greater impairment needs in the debt securities portfolio. The accumulated cost of risk at the end of September 2022 recorded a slight increase to 0.89% from the 0.88% accumulated at the end of the previous quarter, supported by the growth in lending activity.
  • The provisions and other results line closed September with a higher loss than the previous quarter, mainly due to the results from real estate sales carried out in the previous quarter.