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This article first appeared on GuruFocus.

Release Date: October 23, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

• Akbank TAS (AKBTY) reported a 17% year-on-year increase in net income, reaching 38,908 million, with a return on equity (ROE) of 20.4%.

• The bank achieved a 48% year-on-year growth in revenue, driven by robust fee generation and renewed net interest income (NII) momentum.

• Akbank TAS (AKBTY) captured 90 basis points of market share in business banking loans among private banks, demonstrating targeted focus on growth segments.

• The bank’s securities portfolio showed a balanced approach with a focus on yield maximization, achieving a 21% year-to-date growth in foreign currency securities.

• Akbank TAS (AKBTY) maintained a strong capital position with total capital, tier one, and core equity tier one ratios at 17.2%, 13.6%, and 12.4%, respectively.

• The anticipated margin expansion was postponed due to strong monetary tightening in April.

• Economic activity showed signs of moderation in Q3, with mild economic growth expected for the year.

• The bank’s Turkish time deposit market share fell short due to funding optimization efforts and regulation-driven low levels of Turkish RDR.

• The net cost of credit increased to 230 basis points, driven by ongoing retail NPL inflows and strengthening coverage ratios.

• The bank’s full-year cost of credit may slightly exceed the upper end of the guidance range of 150 to 200 basis points.

Q: Could you elaborate on the strong margin expansion in Q3 and expectations for Q4 and beyond? A: (Turk) The strong recovery in Q3 was mainly due to deposit cost easing, aligning with our expectations. However, the latest rate cut in September wasn’t fully reflected in deposit pricing. As we enter Q4, the net interest margin is expected to start above Q3 levels, but the extent of improvement will depend on future rate cuts. We anticipate gradual margin improvement throughout 2026 rather than a peak early in the year.

Q: How do you see the full-year outlook evolving, considering the 25% ROE target and recent macro changes? A: (Turk) Achieving the 25% ROE target may be challenging due to the delay in the rate cut cycle. We now expect the policy rate to be around 38% by year-end, impacting our exit NIM. However, we anticipate a gradual improvement in NIM next year, with ROE likely ending between the current level and the 25% target.