Garanti BBVA announced its 2023 earnings. The bank’s net income for the year stood at TL 86.91 billion, total assets reached TL 2.20 trillion and the loan portfolio of cash and non-cash loans was TL 1.61 trillion. Deposits remained the main source of funding, representing 73 percent of the bank’s total assets with TL 1.6 trillion. This represents an increase of 77 percent in 2023. Garanti BBVA’s capital adequacy ratio was 16.5 percent,* return on average equity (ROAE) was 44.5 percent and return on average assets (ROAA) was 4.9 percent.
Garanti BBVA CEO Recep Baştuğ explained that 2023 was a year marked by two very different economic policies: before and after the May elections. In both periods, the banking sector determined its course through macro-prudential measures and regulations, with a focus on currency-protected deposit schemes. In fact, the transition to currency-protected deposits was a key agenda item leading up to the elections, while post-election, the shift from currency-protected deposits back to Turkish lira deposits took centerstage in the sector.
Banks managed to adapt rapidly to these two different worlds, he noted, with profitability and margin management continuing to be fundamental challenges. The banking sector’s return on equity remained significantly below inflation and other sectors’ returns, similar to the trend from the past few years. In 2023, the increase in non-performing loans was the lowest it has been in recent times. However, there was significant rebalancing in the second half of the year, and in 2024, the cost of risk is expected to normalize, he added.
Baştuğ also noted that after the election, a series of positive changes started to emerge in late 2023, such as simplification through policy changes, with a lower KKM balance, predictable exchange rates and interest rates, positive responses from credit rating agencies, a better risk premium for the country and greater foreign interest. “After the local elections in March, the absence of elections in the country for the next four years supports our expectation that policies to combat inflation will continue to be implemented,” he added.
The Garanti BBVA CEO explained that digitization has played a large role in the bank’s growth thus far. "While our highly competent colleagues at the branches continue to provide top-notch advisory services, mass management and operational processes are driven by artificial intelligence technologies. We currently have hundreds of models with various algorithms ranging from machine learning to deep learning in areas such as marketing and sales, pricing, fraud, credit assessment, and customer satisfaction,” he stated.
Looking toward the future, he also sees digitization and technology shaping the bank’s future growth. “In the upcoming period, productive artificial intelligence technology will be part of our lives. Beyond analyzing existing data, productive artificial intelligence is capable of generating new data and presenting new content. With it, we aim to provide higher-quality services to a broader customer base,” he explained, adding that the bank’s goal is to transform its smart assistant on the mobile app into a personal assistant that understands customers' needs and guides them with proactive suggestions. “Simultaneously, we aim to enhance customer satisfaction to new levels by fostering an environment where our colleagues and new talent are proud to be a member of our bank," he said.
Baştuğ concluded his remarks by recalling how fortunate this generation is to witness the 100th anniversary of the Republic of Türkiye. The country has become part of the group of nations with a GDP over $1 trillion, he noted. “Inspired by the values of the republic, as one of the largest private banks, we are aware of the responsibility that falls on us in terms of economic and social development. I would like to express my gratitude to all our stakeholders, especially our customers, who have supported and trusted us in this journey."