Garanti shines with 4th quarter profits

ISTANBUL - Hürriyet Daily News

Garanti Bank, part-owned by Spain’s BBVA and local Doğuş Group, opened 918 new branches in 2011 and added 1 million new customers in 2011, its top executive says. DAILY NEWS photo, Hasan ALTINIŞIK

Turkey’s Garanti Bank reported impressive fourth quarter figures after raising interest rates on loans in the last three months of 2011 and earning more from bonds.

Garanti, the first Turkish bank so far to announce its fourth quarter results, posted an annual 13 percent increase in earnings, reaching $3.3 billion, according to a filing with the Istanbul Stock Exchange yesterday.

Interest income from loans advanced 24 percent to 6.59 billion Turkish Liras over the course of 2011, according to the filing.

“Banks holding more inflation-linked bonds in their portfolios, such as Garanti, benefited from a surge in the inflation rate,” said Sevda Sarp, an analyst at Erste Securities, in an interview with Bloomberg.
Garanti’s General Manager Ergun Özen said Garanti had topped off a very difficult year with a very impressive performance despite global uncertainty, market volatility and a tightening of regulations. Garanti opened 918 new branches in 2011 and added 1 million new customers. In addition, Garanti made $2.2 billion in loans to the energy sector, making it the largest sector-based investment, said Özen.

Meanwhile, Turkey’s top six listed banks probably posted an average increase in profit of 3.4 percent in the fourth quarter, with state-run Halk Bank and Yapı Kredi Bank also reporting a gain in earnings, estimates compiled by Bloomberg showed. Yapı Kredi, jointly owned by UniCredit and local Koç Holding, is the biggest riser this year on the banking index, climbing 28 percent.

Vakıfbank, a state-run bank, may report an annual 26 percent slide in net income to 288.6 million liras, faring the worst among the largest six banks, an average of seven Bloomber analyst estimates showed.

İşbank, Turkey’s biggest bank by assets, may also post a decline in earnings in the fourth quarter compared with the same period of 2010, according to estimates.

Separately, BBVA yesterday said its net profit had tumbled 34.8 percent in 2011 to 3.004 billion euros because of a devaluation of its U.S. business. The bank posted a 139 million euro net loss in the fourth quarter 2011.