For Garanti BBVA, financial performance is at the core of value creation process and it is the cause and the effect in delivering sustainable growth. By making its products available to customers, investing in its facilities and by constantly improving its business model and processes with an operational and environmental efficiency point of view, Garanti BBVA is committed to have a direct and indirect impact on the economy.

Aiming to use capital effectively to maximize the value created, Garanti BBVA focuses on disciplined and sustainable growth on the basis of a true banking principle with strict adherence to solid asset quality. Combining its approach to unconditional customer satisfaction with its robust capitalization and a focus on efficiency, Garanti BBVA sustains its contribution to the economy through effective balance sheet management.

During 2018, Garanti BBVA increased its consolidated total assets by 13% on an annual basis, bringing it to TL 399 billion, and succeeded in maintaining a high percentage of interest-earning assets. Standing by its customers at all times, Garanti BBVA continued to keep a high share of loans within total assets. Today, Garanti BBVA commands leading positions across various segments in the sector, from retail banking to payment systems, mortgages to auto loans, SMEs to project finance, transaction banking to digital banking. Garanti BBVA preserved its liquid balance sheet composition with the help of its prosperous dual currency balance sheet management. Dynamically managed funding base of the Bank continued to be largely composed of deposits. 22% growth rate in customer deposits base was well above the loan expansion, which helped Garanti BBVA to outperform the sector and improve its loan to deposit ratio (LDR) by 14 points on a consolidated basis. Garanti BBVA’s leading position in consumer deposits is the outcome of its innovative business model, which places customers’ needs and satisfaction at the core of its business.

Garanti BBVA successfully defended its spreads owing to disciplined loan pricings and the high share of demand deposits in total deposits. With the help of CPI-linkers kept as hedge against possible volatility in interest rates, Garanti BBVA was able to improve its Net Interest Margin (NIM) including swap cost by 61 bps despite the soaring market interests. Hence, Garanti BBVA, with 5.3%, continued to have the highest NIM level among its peers.

Garanti BBVA follows a prudent and risk-return focused lending strategy. The Bank displays a proactive and consistent approach to risk assessment, which ensures preservation of its solid asset quality. The economic volatility in 2018 resulted in increased Non-Performing Loan (NPL) ratios. The NPL ratio rose from 2.6% in 2017 to 5.2% in 2018. Net new NPLs mostly consisted of high-amount commercial loans, which accounted for 65% of all new NPLs. On the other hand, consumer and SME loans sourced a smaller portion of net new NPLs, accounting for 35% of total new NPLs.

Garanti BBVA’s diversified and actively managed funding base, its capital adequacy ratio of 16.5%, its growing deposits with more than 16 million customers’ trust, and continuous access to foreign funding sources feed Garanti BBVA’s business model and long-term sustainable growth. Paying the utmost attention to stakeholder satisfaction, Garanti BBVA completed the rollout of its new service model in branches in 2018. The new branch model already began contributing flexibility to the sales force, while increasing revenue generation capacity and cost efficiency. Garanti BBVA continued to focus on cost/revenue synergies and improved its Cost/Income ratio by 12pp since 2015.

Garanti BBVA’s business model, along with its well-diversified fee sources and its further digitalized processes, support its ability to generate sustainable income. All of them combined secure the highest net interest margin, and the highest net fees and commissions base among its peers. Furthermore, Garanti BBVA maintains its focus on efficiency and effectively manages its operating costs to foster sustainable value creation.


* 2018 projections were updated on 26 July 2018 based on macroeconomic estimations that were reshaped during the year.
1 Income defined as NII + Net F&C +Trading gains/losses excluding FX provision hedges + Other income excluding provisions reversals + Income from subsidiaries