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Garanti BBVA announces 1H23 financial results.

Garanti BBVA announces 1H23 financial results.

Garanti BBVA's TL customer deposits surpassed its TL loans 

Türkiye Garanti Bankası A.Ş., announced its financial statements dated 30 June 2023. Based on the consolidated financials, the Bank’s net income in the first 6 months of the year recorded as TL 33 billion 809 million 740 thousand. Asset size realized at TL 1 trillion 891 billion 92 million 777 thousand and the Bank’s contribution to the economy through cash and non-cash loans was TL 1 trillion 312 billion 612 million 732 thousand. Actively managing the funding base, customer deposits continued to be the main funding source; 74% of assets are funded via deposits. Customer deposit base reached to TL 1 trillion 396 billion 970 million 11 thousand with 54% growth in the first 6 months of the year. Preserving the strong capital stance, Bank’s capital adequacy ratio was realized at 15.8%^*. The Bank delivered an ROAE (Return on Average Equity) of 38.3%^** and an ROAA (Return on Average Assets) of 4.2%^**.

*Calculated without the forbearance introduced by BRSA

** In calculations of average return on assets and average return on capital, one-off items are not included in annualization of net profit.

Commenting on the topic, Garanti BBVA CEO Recep Baştuğ said:, "In the second quarter of 2023, we managed our balance sheet in accordance with regulations. In this context, our bank's TL loan portfolio reached 600 billion TL with a net increase of nearly 80 billion TL. Our growth focus was on SME and consumer loans; while growth in corporate and commercial loans remained relatively muted. With market share gains in SME loans, we also successfully maintained our traditional leadership position in credit cards and consumer loans during this quarter as well.

As a result of the long-term, trust-based relationship we have established with our customers, we demonstrated a differentiating performance in TL deposits. Foreign Currency Protected Deposits continued to be the main driver behind the growth. Our bank became the leader among private sector banks by achieving the highest FX - protected deposit volume. Today, FX - protected deposits make-up more than two-thirds of our TL time deposits. TL deposit is a focus area in which we manage diligently, as per the regulations. As a result, our TL loan deposit ratio has improved even further, reaching its lowest level in history."

Recep Baştuğ continued his words as follows: "In the second quarter of the year, we successfully renewed our syndicated loan facility, once again demonstrating Garanti BBVA's ability to create sustainable funding. We linked the social performance goals of the syndication loan, which we renewed with the participation of 26 banks, to the financing of women entrepreneurs and micro-scale businesses in the earthquake zone. When we successfully achieve our targets, there will be a discount in the interest of the loan, and we will use this gain for the earthquake region. Thus, we will continue to contribute to both strengthening the regional trade and ensuring equal opportunities."

"In line with our responsible banking principle and inclusive growth strategic priority, we are moving forward with a focus on being an inclusive bank that creates long-term value for all stakeholders. Our most recent work in this field is the 'Women Who Know Their Account' program, which we announced in July, for women who have not yet encountered banking services. The program aims to support women to receive financial literacy training and manage their own economies with the special product opportunities we offer. As a bank, we value every individual's participation in social and economic life and believe that contemporary and strong societies are founded on the principle of equal opportunity.

Recep Baştuğ pointed out that global warming will be the most important issue both globally and nationally in 2023 and the following years and continued his words by saying, "Leaving a more livable world for future generations is among our most important responsibilities. We are glad to announce that we are carrying our Blue Breath (Mavi Nefes) journey which we launched in 2021 with the cooperation of Turkish Marine Environment Protection Association/ TURMEPA in the Sea of Marmara, to Lake Van. Our goal is to prevent pollution in the lake, make the Lake Van Basin resistant to climate change, and create regional awareness on this issue."

Baştuğ said: "Today, with 14 million mobile customers, we are the bank with the most used banking application in Turkey. I would like to thank my colleagues who have made a great effort and contribution during this process and to all our stakeholders, especially our customers, who have accompanied us on this journey, supported us, and trusted us".

Garanti BBVA’s Selected Consolidated Financial Indicators (30 June 2023)

Turkish presentation regarding BRSA consolidated financial results of Garanti BBVA as at June 30, 2023 can be retrieved from Garanti BBVA Investor Relations website at the address of www.garantibbvainvestorrelations.com.

Summary Financial Data on Operating Results of Accounting Period:

• Average return on assets is 4.2%.
• Average return on equity is 38.3%.
• Support provided to economy through performing cash and non-cash credits reached TL 1 trillion 312 billion 612 million 732 thousand.
• Market shares of total performing loans, TL loans and FX loans are respectively 10.0%, 10.2% and 9.5%.
• Since the beginning of the year, total customer deposits grew by 54.0% and market share reached 12.9% level.
• Share of customer demand deposits in total customer deposits reached 41%.
• Capital adequacy ratio is recorded as 15.8%*, above the required level of 12.2%.
• Non-performing loans ratio is recorded as 2.1%.

*Calculated without the forbearance introduced by BRSA