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Turkiye Garanti Bankasi AS (TKGBY)
OTHER OTC:TKGBY
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Turkiye Garanti Bankasi AS
(OTC:TKGBY)
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Rating:72Outperform
Price Target:
$3.50
â–²(2.34% Upside)
Action:ReiteratedDate:02/09/26
The score is driven mainly by good (but somewhat volatile) financial performance, supported by constructive technicals and an attractive valuation. Earnings-call guidance reinforces the outlook, while higher expenses, some asset-quality pressure, and regulatory constraints temper the overall rating.
Positive Factors
Strong ROE and Profitability
Sustained high ROE and cumulative net income indicate a profitable business model and effective capital deployment. Over the medium term this supports internal capital generation, ability to absorb shocks, and competitive return targets that underpin shareholder reinvestment and stability of core banking operations.
Robust Deposit Franchise
A large, stable deposit base with high share of demand deposits strengthens low-cost funding and liquidity resilience. This structural funding advantage supports margin stability, funds loan growth targets, and reduces reliance on volatile wholesale funding across typical 2–6 month planning horizons.
Fee Income Momentum & Market Position
Rapid, recurring fee growth driven by payments and wealth products diversifies revenue away from interest margins. A leading market position in payment fees and higher mutual fund share supports durable non‑interest income, helping cover elevated operating investments and smoothing earnings across interest-rate cycles.
Negative Factors
High Operating Expense Growth
Very large OpEx expansion compresses operating leverage and raises the breakeven threshold for future margins. If fee growth or NIM targets underperform, sustained higher OpEx will pressure profitability and cash generation for multiple quarters, making cost discipline and efficiency realization critical.
Concentrated Retail Asset-quality Risk
Rapid consumer and card lending growth has increased exposure to concentrated retail credit risk. Elevated NPL flows concentrated in these segments and modest Stage‑2 coverage imply potential for higher normalized cost of risk, reducing sustainable earnings and necessitating higher provisions over coming quarters.
Rising Leverage & Short-term External Debt
Asset scale-up has been funded with rising debt and notable short‑term external maturities, creating refinancing and liquidity risk if market access tightens. While FX buffers exist, higher leverage reduces flexibility and increases sensitivity to macro shocks or tighter funding conditions over the medium term.
Turkiye Garanti Bankasi AS (TKGBY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$12.87B
Dividend Yield3.58%
Average Volume (3M)2.46K
Price to Earnings (P/E)5.1
Beta (1Y)0.54
Revenue Growth29.35%
EPS Growth-6.44%
CountryUS
Employees22,538
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.14
Shares Outstanding4,200,000,000
10 Day Avg. Volume1,509
30 Day Avg. Volume2,455
Financial Highlights & Ratios
PEG Ratio0.25
Price to Book (P/B)1.26
Price to Sales (P/S)0.57
P/FCF Ratio3.03
Enterprise Value/Market Cap87.50
Enterprise Value/Revenue1.30
Enterprise Value/Gross Profit3.67
Enterprise Value/Ebitda10.08
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.86
Revenue Forecast (FY)$11.12B
Turkiye Garanti Bankasi AS Business Overview & Revenue Model
Company DescriptionTurkiye Garanti Bankasi A.S. provides various banking products and services. It offers current, savings, time and term deposit, ELMA, structured deposit, and gold accounts; and general purpose, auto, revolving, house, discount, SME project, installment, working capital, foreign currency, mortgage, and other loans, as well as spot TL and foreign currency, letters of guarantee and reference, and overdraft accounts. The company also provides various cards; and auto, liability, health, unemployment, life, house, individual accident, automobile, business premises, fire, freight, engineering, accident, loan, and agriculture insurance products, as well as pension products. In addition, it offers mutual funds, T-bills/government bonds, Eurobonds, repos, equities, dual currency deposit transactions, Turkish derivatives exchange, e-trader, forward transactions, and taxation services; cash management services; and SME specific products, such as support packages, foreign trade financing and legislation, and related services. Further, the company provides leasing, fleet management, factoring, investment and private banking, payment, safety box, and Internet and mobile/SMS banking services. As of December 31, 2021, the company operated 872 branches and 5,401 ATMs. Turkiye Garanti Bankasi A.S. was founded in 1946 and is headquartered in Istanbul, Turkey. As of May 18, 2022, Turkiye Garanti Bankasi A.S. operates as a subsidiary of Banco Bilbao Vizcaya Argentaria, S.A.
How the Company Makes MoneyGaranti BBVA primarily makes money through (1) net interest income and (2) non-interest (fee and commission) income, supplemented by trading/treasury results and other operating income.
1) Net interest income (core banking spread): The bank collects interest on interest-earning assets—mainly loans and advances to customers (consumer loans, credit cards, SME/commercial loans, and corporate loans) and, where applicable, interest from securities and interbank placements. It pays interest on funding sources such as customer deposits (demand and time deposits), wholesale/borrowed funds, and other liabilities. The difference between interest income and interest expense (the net interest margin) is a key earnings driver and is affected by loan growth, deposit mix, funding costs, and interest-rate conditions.
2) Fees and commissions (banking and payments): The bank earns recurring fees from services including payment systems (credit/debit cards, merchant acquiring, POS services, and transaction processing), account and money-transfer services, cash management, trade finance (e.g., letters of credit/guarantees), and various advisory/servicing charges associated with lending and other banking activities.
3) Treasury, trading, and capital markets activities: The bank can generate income from treasury operations such as foreign exchange services, derivatives and risk-management products offered to clients, and trading/valuation results from financial instruments held for liquidity management or client facilitation. The size and volatility of this income can depend on market conditions.
4) Other contributions: Depending on the bank’s product set, earnings may also include income associated with distributing third-party products (e.g., investment funds or insurance) and income from subsidiaries/affiliates. Specific material partnerships, ownership relationships, or segment-level revenue concentrations are null.
Turkiye Garanti Bankasi AS Earnings Call Summary
Earnings Call Date:Feb 04, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call conveyed a broadly positive picture: strong profitability, robust loan and deposit growth, improving NIM trends, solid capital and liquidity buffers, and standout fee momentum. Key risks include elevated and front-loaded operating expenses, some deterioration in asset-quality metrics concentrated in retail/credit card portfolios, one-off provisioning/tax dynamics that depress reported quarterly results, and regulatory/macroprudential constraints that could limit near-term growth or fee normalization. Management presented conservative guidance and emphasized buffers and active funding management to mitigate risks.Q4-2025 Updates
Positive Updates
Strong Profitability and ROE
Cumulative net income of TRY 111 billion in 2025, up 21% year-on-year, delivering a 29% ROE for the year (approximately 30% ROE excluding a tax-regulation one-off impact). Management emphasized continued ROE above the sector average.
Robust Core Banking Revenues
Core banking revenues reached TRY 300 billion (management noted the highest level among peers). Core banking revenues grew for eight consecutive quarters and increased 11% quarter-on-quarter in 4Q driven mainly by higher net interest income.
Net Interest Margin and NII Strength
Net interest margin recovered by c.60 basis points in 4Q to 5.4%. Net interest income (including swap cost) doubled year-on-year, implying approximately 1.2 percentage points annual margin expansion versus prior year. Management guidance targets a further NIM expansion of around 75 basis points in 2026.
Rapid TL Loan Growth and Asset Mix
TL loans reached TRY 1.7 trillion. TL lending grew 10% quarter-on-quarter in 4Q and 45% for the full year 2025 (above operating plan guidance). Performing loans now represent ~58% of assets, reflecting a customer-driven, higher-yielding asset mix.
Strong Deposit Franchise and Funding Composition
Total customer deposits exceeded TRY 3 trillion, comprising 69% of total assets. TL deposit market share among private peers rose to 21%. Demand deposits represent 41% of total deposits, supporting margin resilience.
Solid Capital and Liquidity Buffers
Consolidated CET1 ratio of 13.1% and capital adequacy ratio of 17.5% (without BRSA forbearance). Management reported TRY 179 billion of excess capital and a strong foreign-currency liquidity buffer of $7.1 billion against total external debt of $9.8 billion (short-term portion $3.5 billion).
Fee Income Momentum and Market Positions
Fee base grew c.50% year-on-year. Payment systems fees were the main driver, with the bank ranked number one in money transfer fees and in both life and non-life insurance fees. Mutual fund market share rose by 1.3 percentage points to 11.6%.
Successful Wholesale Funding and Sustainability-linked Issuances
Two new transactions in 2025 brought subordinated bond issuance to $2.45 billion over two years (largest in recent years). The bank issued Türkiye's first Biodiversity and Blue-Themed Bond and secured a syndicated loan with diversified maturities (including a 3-year tranche and a 2-year tranche).
Operating Plan Guidance
2026 targets: TL loan growth 30–35%, FX loan growth mid-single digits, fee growth 30–35%, net cost of risk normalizing to 2.0–2.5%, NIM expansion ~75 bps, and a targeted mid-single-digit positive real ROE (management expects real ROE to turn positive in 2026).
Efficiency Investment with Coverage by Fees
Operating expenses grew 67% in 2025 due to customer acquisition and investments (including AI/digital transformation). Management expects a large portion of the OpEx base (bank-only) to be covered by fee income (~80–85%) and forecasts cost-to-income to moderate toward ~40% over time as inflation declines and efficiencies materialize.
Negative Updates
Sharp Increase in Operating Expenses
OpEx base rose 67% in 2025, outpacing the sector and inflation. Management attributes this to front-loaded customer acquisition costs and non-HR investments; guidance implies OpEx growth will exceed average inflation in 2026 as well.
Asset Quality Pressures and Coverage
NPL ratio increased modestly to 3.1% (in line with expectations). Retail and credit card portfolios accounted for ~70% of net NPL flows. Stage‑2 share remained around 10% while overall Stage‑2 coverage fell to 9% (foreign currency Stage‑2 coverage reported at 16%).
Net Provisions and One-Off Dynamics
Net provisions rose in 4Q due to the absence of prior exceptional provision reversals; management cautioned that large-ticket provision reversals recorded in 2025 are not expected to repeat, thus normalized net cost of risk is guided higher (2.0–2.5%).
Negative Impact from CPI-Linkers and Reserve Remuneration
CPI-linkers had a net negative contribution to NIM in the quarter (-0.4% quarter-on-quarter effect reported) and management expects CPI income to be a -60 bps headwind and reserve remuneration a -70 bps headwind when inflation decelerates, partly offset by other funding effects.
Regulatory and Macroprudential Constraints
Ongoing macroprudential measures (loan growth caps, TL deposit ratio windows) and recent regulatory changes (limits on FX loan growth, potential interchange fee reductions, credit-card/overdraft limit adjustments) could constrain volume growth and/or fee income; management noted guidance was prepared conservatively without assuming easing of prudentials.
Tax and One-off Effects Lowering Reported 4Q Profit
4Q bottom line was impacted by tax-regulation-related effects; management indicated that apple-to-apple adjustments would raise reported 4Q profitability (they cited a difference of several hundred million TRY in tax timing effects). Effective consolidated tax rate in 2025 was around low-to-mid 20s percent.
Concentrated Retail NPL Flow
Despite improvements in some retail metrics, credit cards and consumer loans remain the primary source of net NPL inflows, keeping portfolio risk concentrated in retail segments that experienced rapid growth.
Short-Term External Debt Exposure
Total external debt is $9.8 billion with $3.5 billion short-term. While management highlights a $7.1 billion FX liquidity buffer, the short-term external debt component presents a maturity risk that requires active funding management.
Higher Normalized Cost of Risk vs. Historical Levels
Management expects normalized cost of risk in 2026 of 2.0–2.5% (versus historical normalized levels around 1.5–1.7%), reflecting faster consumer and credit card growth and the absence of prior large provision reversals.
Company Guidance
Management guided on a conservative macro base of year‑end 2026 inflation ~25% and a policy rate of ~32%, and set balance‑sheet and P&L targets including TL loan growth of 30–35% (FX loans mid‑single digits), net interest margin expansion of ~75bps (current NIM 5.4%; every 100bps policy move ≈15bps NIM effect), net cost of risk normalizing to 2.0–2.5%, fee growth of 30–35% with ~80–85% of OpEx covered by fees (OpEx expected to grow above average inflation), and a goal of mid‑single‑digit positive real ROE in 2026. Key capital/liquidity metrics: consolidated CET1 13.1%, CAR 17.5%, TRY 179bn excess capital; funding/deposit profile: customer deposits >TRY3.0tn (69% of assets), TL deposits market share 21%, demand deposits 41%; loans and asset quality: TL loans TRY1.7tn (2025 growth 45%), performing loans 58% of assets, NPL ratio 3.1%, Stage‑2 coverage 9% (FX Stage‑2 16%); wholesale: total external debt $9.8bn ($3.5bn short‑term) and a $7.1bn FX liquidity buffer; recent two‑year subordinated issuance $2.45bn.Turkiye Garanti Bankasi AS Financial Statement Overview
Summary
Strong multi-year revenue growth and consistently positive earnings, supported by strong ROE. Offsetting factors include notable margin compression in 2025 vs. 2024, rising leverage into 2025, and historically volatile cash flow (particularly the 2024 dip despite a 2025 rebound).Income Statement
Revenue has expanded rapidly over the period, with a particularly strong acceleration in 2025 (annual revenue up ~43%). Profitability is solid with positive operating profit and net income each year, though margins have been volatile: net profit margin fell from ~32% (2024) to ~11% (2025), and operating profitability also compressed versus prior peaks. Overall, strong growth and consistent earnings are key positives, offset by notable year-to-year margin instability.74
Positive
Balance Sheet
The balance sheet shows meaningful scale-up in assets and equity over time, supporting growth. Leverage is moderate for the most recent year (debt-to-equity ~0.97 in 2025) and improved versus 2021 (~1.22), but has been trending upward since 2023 as debt rose faster than equity. Returns on equity remain strong (mid-20% range in 2024–2025), which is a positive, but rising leverage into 2025 adds risk if profitability softens.67
Positive
Cash Flow
Cash generation is mixed. 2025 shows strong operating and free cash flow (both positive) and free cash flow roughly in line with net income, which supports earnings quality. However, 2024 had sharply negative operating and free cash flow, highlighting volatility and potential sensitivity in working-capital/operating cash movements. The rebound in 2025 is encouraging, but the uneven pattern keeps cash-flow quality below top-tier.63
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 988.39B | 287.17B | 346.52B | 177.72B | 85.59B |
| Gross Profit | 410.34B | 287.17B | 199.32B | 133.01B | 61.46B |
| EBITDA | 160.63B | 0.00 | 109.31B | 78.23B | 19.35B |
| Net Income | 109.82B | 91.24B | 86.37B | 58.29B | 13.47B |
Balance Sheet | |||||
| Total Assets | 4.55T | 3.00T | 2.20T | 1.30T | 850.48B |
| Cash, Cash Equivalents and Short-Term Investments | 31.82B | 591.84B | 474.34B | 200.82B | 182.89B |
| Total Debt | 431.79B | 223.97B | 150.11B | 104.47B | 97.20B |
| Total Liabilities | 4.10T | 2.67T | 1.96T | 1.15T | 770.17B |
| Stockholders Equity | 444.07B | 329.79B | 244.70B | 152.64B | 79.98B |
Cash Flow | |||||
| Free Cash Flow | 184.76B | -155.25B | 186.17B | 43.63B | 31.02B |
| Operating Cash Flow | 196.04B | -145.82B | 191.28B | 45.76B | 32.31B |
| Investing Cash Flow | -63.06B | -46.85B | -81.76B | -55.25B | -12.41B |
| Financing Cash Flow | 222.25B | 95.27B | 10.45B | 25.67B | 29.34B |
Turkiye Garanti Bankasi AS Technical Analysis
Negative
3.42
Price Trends
3.44
Negative
3.33
Negative
3.33
Negative
Market Momentum
-0.13
Positive
40.88
Neutral
25.96
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TKGBY, the sentiment is Negative. The current price of 3.42 is above the 20-day moving average (MA) of 3.34, below the 50-day MA of 3.44, and above the 200-day MA of 3.33, indicating a bearish trend. The MACD of -0.13 indicates Positive momentum. The RSI at 40.88 is Neutral, neither overbought nor oversold. The STOCH value of 25.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TKGBY.
Turkiye Garanti Bankasi AS Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $25.77B | 11.79 | 19.28% | 4.82% | 8.72% | 27.70% | |
72 Outperform | $12.87B | 5.09 | 27.96% | 3.58% | 29.35% | -6.44% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
67 Neutral | $19.55B | 14.56 | 21.25% | 5.56% | -11.64% | -8.75% | |
65 Neutral | $16.32B | 6.51 | 9.31% | 3.71% | -2.90% | 16.10% | |
57 Neutral | $21.12B | 9.97 | 11.15% | 4.98% | 1.13% | -11.93% | |
56 Neutral | $14.94B | 12.58 | 21.37% | 4.29% | 12.43% | 56.30% |
* Financial Sector Average
TKGBY
Turkiye Garanti Bankasi AS
3.07
-0.17
-5.19%
BCH
Banco De Chile
38.14
11.04
40.73%
BSBR
Banco Santander Brasil
5.73
1.12
24.40%
BSAC
Banco Santander Chile
31.07
8.79
39.45%
BAP
Credicorp
324.04
141.72
77.73%
WF
Woori Finance Holdings Co
66.03
31.69
92.28%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.