Garanti BBVA led private banks in TL loan growth in 2021
Garanti BBVA recently released its 2021 results, posting the highest growth in Turkish lira (TL) loans among private banks. The total amount of cash and non-cash loans for the year was TL 609.74 billion, and assets reached TL 849.40 billion. Deposits remained the primary source of funding, representing 69 percent of total assets, or TL 582.26 billion and growth of 63 percent over the year. Garanti BBVA’s strong capital position remains, with a capital adequacy ratio of 13.98 percent (not including temporary measures taken by Turkey’s financial regulator, the BRSA). The return on average equity (ROAE) was 19.0 percent and the return on average assets (ROAA) was 2.0 percent (excluding one-off items). The bank’s net income for the year was TL 13.59 billion.
Garanti BBVA CEO Recep Baştuğ stressed the resilience of the bank and the Turkish banking sector as a whole, despite the challenging conditions, on both a global and local level in 2021. He also added: “We ended the year with very successful results, a year in which the banking sector prioritized healthy balance sheet management, digitization and sustainability.”
Garanti BBVA’s dynamic balance sheet management allowed the bank to increase its support for the Turkish economy, well above the rest of the banking sector. TL loans rose by 27 percent, reaching TL 264 billion in 2021. With domestic demand high, Garanti BBVA grew in a balanced and stable manner in both commercial and consumer loan portfolios. Garanti BBVA has taken a prudent and proactive approach to lending over the years, with transparent classification of loans. As a result, asset quality is clear, and any possible deterioration in the quality would be covered by the bank’s high coverage ratios. “This conservative stance and our strong capital base allow us to grow by contributing to the economy without interruption,” the CEO emphasized.
In terms of digitization, Turkey has witnessed some of the fastest growth in the world in digital developments during the pandemic. In the banking sector specifically, the industry made rapid progress in both products and online banking transactions, and customer acquisition was transferred to digital channels. “Thanks to the investments we have been making in digital banking for many years, we maintain our leading position in this field. By utilizing the power of technology, we continue to stand by our customers and offer solutions that make their lives easier,” said Garanti BBVA CEO Recep Baştuğ. As a result, the number of active mobile customers rose from 7.7 million at the end of 2019 to 10.6 million at the end of 2021 - an increase of 38 percent - and the number of active digital customers surpassed 11 million.
Meanwhile, sustainable finance continued to dominate the banking sector over the past year - both in Turkey and around the world. Evidence of this is Turkey signing the Paris Agreement on climate change in 2021. And Garanti BBVA became the first and only bank in Turkey to make a commitment to the UN Net Zero Banking Alliance in 2021, while continuing to be carbon neutral since 2020. “Prior to this commitment, we were also the first bank in Turkey to announce that we will not be financing coal and coal-related activities,” Recep Baştuğ recalled. He also pointed to Garanti BBVA’s achievement of launching the world’s first green public offering, the implementation of Garanti BBVA’s Climate Index and the Corporate Green Vehicle Package - a first in the country. “While making changes in our own operations, we are also continuing to encourage society and our customers to make a transition to a greener future. The biggest players in sustainable development will, undoubtedly, be the banks, which provide two-thirds of global finance,” he added.
Garanti BBVA values not only its impact on the economy but also its contributions to the environment, social issues and technology. “We act with this awareness in mind,” stated CEO Recep Baştuğ. “I would like to thank all of our stakeholders, especially our customers who participated in this journey, supported and trusted us, as well as my colleagues whose efforts greatly contributed to this process,” he concluded.