financial statements 2015


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  • Sound economic growth in a complex and volatile environment.
  • Strong activity continues, focused on loans in Turkish lira to the retail segment and foreign-currency deposits.
  • Good performance of recurring revenue.
  • Outstanding asset quality indicators.
Business activity. Turkey presented on an ongoing basis

(Year-on-year change at constant exchange rate. Data as of 31-12-2015)

Net interest income/ATA

(Percentage. Constant exchange rate)

Operating income

(Million euros at constant exchange rate)

(1) At current exchange rate: +131.6%.
Net attributable profit

(Million euros at constant exchange rate)

(1) At current exchange rate: +19.5%.
Garanti. Composition of assets and lending portfolio (1)

(Percentage as of 31-12-2015)

(1) Garanti Bank only.
Garanti. Composition of liabilities (1)

(Percentage as of 31-12-2015)

(1) Garanti Bank only.
Financial statements and relevant business indicators
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Million euros and percentage

Turkey (1) Turkey en continuidad (2)
Income statement 2015 2015 Δ% Δ% (3) 2014
Net interest income 2,194 850 15.7 20.4 735
Net fees and commissions 471 187 (1.8) 2.2 191
Net trading income (273) (84) n.m. n.m. 1
Other income/expenses 42 17 (4.7) (0.8) 18
Gross income 2,434 971 2.8 7.0 944
Operating expenses (1,160) (448) 13.5 18.0 (395)
Personnel expenses (565) (221) 9.4 13.8 (202)
General and administrative expenses (478) (184) 16.9 21.7 (158)
Depreciation and amortization (118) (43) 21.0 25.9 (35)
Operating income 1,273 523 (4.9) (1.0) 550
Impairment on financial assets (net) (422) (156) 6.5 10.9 (146)
Provisions (net) and other gains (losses) 2 1 n.m. n.m. (11)
Income before tax 853 368 (6.3) (2.4) 392
Income tax (166) (73) (11.2) (7.5) (82)
Net income 687 295 (5.0) (1.1) 310
Non-controlling interests (316) - - - -
Net attributable profit 371 295 (5.0) (1.1) 310
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Million euros and percentage
Balance sheet 31-12-15 31-12-15 Δ% Δ% (3) 31-12-14
Cash and balances with central banks 9,089 2,272 (8.3) 2.8 2,478
Financial assets 15,006 3,751 (16.8) (6.7) 4,508
Loans and receivables 60,702 15,175 4.9 17.7 14,464
Loans and advances to customers 55,182 13,795 5.3 18.1 13,098
Loans and advances to credit institutions and other 5,520 1,380 1.0 13.3 1,366
Tangible assets 1,406 352 80.8 102.8 194
Other assets 2,801 697 (0.0) 12.2 697
Total assets/liabilities and equity 89,003 22,248 (0.4) 11.7 22,342
Deposits from central banks and credit institutions 16,823 4,206 (3.8) 7.9 4,374
Deposits from customers 47,148 11,787 1.4 13.7 11,626
Debt certificates 7,954 1,989 53.3 71.9 1,297
Subordinated liabilities 51 13 (45.2) (38.6) 23
Financial liabilities held for trading 843 211 9.9 23.3 192
Other liabilities 14,521 3,004 (23.2) (13.9) 3,913
Economic capital allocated 1,663 1,039 13.2 27.0 918
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Million euros and percentage
Relevant business indicators 31-12-15 31-12-15 Δ% Δ% (3) 31-12-14
Loans and advances to customers (gross) (4) 57,768 14,442 5.9 18.8 13,635
Customer deposits under management (4) 43,393 10,848 8.4 21.5 10,011
Off-balance sheet funds (5) 3,620 905 2.7 15.1 882
Efficiency ratio (%) 47.7 46.1

NPL ratio (%) (2) 2.8 2.8

NPL coverage ratio (%) (2) 129 129

Cost of risk (%) (2) 1.24 1.09

(1) Since the third quarter of 2015, BBVA’s total stake in Garanti is consolidated by the full integration method. (2) Garanti’s financial statements integrated in the proportion corresponding to the percentage of the Group’s stake (25.01%) until the second quarter of 2015. (3) Figures at constant exchange rate. (4) Excluding repos. (5) Includes mutual funds, pension funds and other off-balance sheet funds.

Macro and industry trends

Turkey maintains strong economic growth, improving the outlook of market forecasts, which in 2015 could have been 3.6%, in a very complex and volatile geopolitical setting, but with the support that the fall in oil prices provides to disposable income in an energy-dependent economy.

Inflation is very high (8.8% in December 2015), exceeding the price stability target set by the Central Bank of Turkey (CBRT), which should tighten the monetary policy to abort the risk of an unanchoring of expectations, of an additional weakening of the Turkish lira and of a deterioration of the capital account. These measures are more necessary insofar as the fiscal policy will further support growth in 2016.

The Turkish financial sector is maintaining the moderate rate of credit growth (especially loans to individuals) that started in the summer, although it is still at double-digit year-on-year rates (up 20% as of December, measured in local currency; adjusted for the effect of the depreciation of the Turkish lira, the increase would be closer to 14%). Growth in customer fund gathering has also slowed in 2015, although it remains at double digit rates year-on-year (17.4%), according to the latest figures as of December 2015. The NPL ratio increases slightly but continues at around 3%. The sector has sound levels of capitalization. In terms of profitability, the banks continue to focus on repricing loans to protect their net interest income, since the cost of finance is high as a result of strong competition and tight liquidity conditions. The stability of the NPL ratio at relatively low levels continues to be one of the sector’s main strengths.


All the comments below on rates of change will be expressed at a constant exchange rate, unless expressly stated otherwise.

The acquisition of the additional 14.89% of Garanti’s share capital was completed in the third quarter of 2015 after receiving the relevant authorizations. In accordance with applicable accounting rules and as a result of the agreements reached, BBVA Group has valued the initial shareholding (25.01%) at fair value and consolidated its entire current stake (39.9%) by the full integration method. In order to facilitate comparison with the historical figures, the variations presented below are given on an ongoing basis, i.e. at 25.01% and integrated in the proportion corresponding to this percentage stake, unless expressly stated otherwise.

As of December 2015, Turkey registered an increase in gross lending to customers of 18.8%, as a result of the area’s strategy focused on selective growth in more profitable products. Consequently, the performance of the loan portfolio is strongly supported by loans in Turkish lira to the retail segment, specifically mortgage loans, lending to companies and credit cards (up 23.3%, 20.3% and 15.3%, respectively, since 31-Dec-2014). Foreign-currency loans have contracted, if we compare the figure for December 2015 with that for the same date the previous year. This is the result of uncertainty and volatility leading to delays in the execution of some project finance deals.

In the last quarter of the year, in line with a prudent approach to the changes in the global environment, Garanti has reclassified certain loans as subjective non-performing, which explains why the NPL ratio closed at 2.8%, although it remains below the sector average. The coverage ratio increased to reach 129%.

On the liabilities side, customer deposits under management continue to perform strongly. They closed 2015 with a year-on-year rate of growth of 21.5%, boosted particularly by the strong performance of those denominated in foreign currency.

Lastly, Garanti has a comfortable liquidity position, thanks to two factors: the growing contribution from customer deposits (accounting for around 55% of total liabilities); and access to alternative, longer-term sources of finance.


Turkey ended 2015 with a net attributable profit of €371m (€295m on an ongoing basis), 24.4% more than in the same period in 2014. The most notable items in this area’s income statement are:

  • Excellent performance of net interest income (up 20.4% year-on-year), thanks to strong new loan production and maintenance of customer spreads, supported by adequate management of the repricing of asset products and the diversification of sources of finance.
  • Fees and commissions performed better in the last three months of 2015, which is reflected in the year-on-year rise in the cumulative figure through December (up 2.2%). Outstanding are those originated by collection and payment services and those from project finance customers, as well as the growing contribution from the effective use of digital channels. The above, along with greater diversification of this revenue, has offset the negative impact of the regulation approved at the end of 2014 limiting the fees charged for consumer loans and credit cards.
  • NTI has been adversely affected by volatility in the wholesale financial markets, particularly in the second half of the year.
  • Operating expenses have been impacted by the effect of the depreciation of the Turkish lira on costs denominated in other currencies and the impact of high inflation rates.
  • Lastly, impairment losses on financial assets are up, mainly due to the effect of the depreciation of the Turkish lira. However, the cumulative cost of risk through 31-Dec-2015 (1.09%) stands at levels below those registered the previous year (1.16%).