Turkish Banking Sector Analysis: Q4 2024

An overview of the financial position, performance, and loan and deposit dynamics of Turkish banks, both together and individually, is presented, while the user-friendly, interactive PowerBi format allows readers to examine various data points related to performance, position, loans, and deposits: The report is available in two languages: English and Turkish.

Highlights for Q4 2024

• The banking sector structure remained unchanged in Q4 2024, both in terms of ownership and licenses types and market share. Two new digital banks have started operations in Q4: Ziraat Dinamik Banka A.Ş. and Colendi Bank A.Ş., continuing the trend of digital banks popping up and bringing the total number of digital banks in Türkiye to 4.
• Slowed-down weakening of TRY to USD began in the 2nd quarter 2024, which continued in 3rd quarter and led to the surge in the growth rate of assets in USD terms, indicating that the overall growth outpaced foreign exchange rate changes during that period, which has not happened since at least early 2022. In the 4th quarter 2024 TRY weakened to USD by 13% ann., however the assets in USD terms still grew faster (14.2%) continuing this positive trend, but indicating a possible slow-down in the upcoming periods.
• The key rate remained stable in 2nd and 3rd quarter 2024, and even started to decrease in the end of 4th quarter in 2024, consecutively loan rates and deposit rates started to decrease with increase in NIM due to higher sensitivity of deposit rates.
• Loan portfolio grew mainly in the corporate segment supported with credit cards and consumer loans.
• Deposit maturity structure worsened in the last 12 months and shifted towards short-term deposits, which is normal in the rates growing environment.
• The latter three highlights together potentially mean, that the shift to shorter-term deposits amid falling rates has disproportionately benefited banks, driving higher earnings despite the changing rate environment.