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Turkish Banks Poised for Strong Q3 Profits; Industrial Firms Face Margin Pressure

Bank

As Turkey’s financial sector enters the third-quarter earnings season, analysts project a robust rebound in banking profitability, driven by expanding margins and resilient fee income. Meanwhile, industrial and non-financial firms continue to struggle with weak domestic and external demand, as cost pressures and inflation differentials curb earnings growth.

Banking Sector: Margins Expand, Provisions Rise Slightly

Across the board, Turkish banks are expected to post higher quarterly profits, excluding the impact of swaps, as net interest margins (NIMs) improved compared with the previous quarter. However, analysts also anticipate a slight uptick in provisioning expenses, reflecting prudent risk management in a volatile rate environment.

According to estimates, the strongest net profit growth compared to Q2 is expected from:

  • Halkbank (HALKB.IS): +50%

  • Akbank (AKBNK.IS): +22%

  • Yapı Kredi Bankası (YKBNK.IS): +18%

These gains are underpinned by higher loan yields, controlled funding costs, and improving spreads—particularly in retail and SME lending segments.

Insurance Sector: Profitability Supported by Premium Growth

Insurance companies also continue to post resilient results, benefiting from strong premium generation, technical profitability, and investment income.
Among insurers, the standout performers are projected to be:

  • Anadolu Sigorta (ANSGR.IS): +14% quarterly net profit growth

  • Anadolu Hayat (ANHYT.IS): +9% quarterly net profit growth

These results reflect the sector’s ability to leverage pricing power and investment income amid persistent inflationary conditions.

Non-Financials: Demand Weakness and Margin Pressure Persist

In contrast, industrial companies faced a tougher third quarter. Both domestic and global demand softened, while high input costs and exchange rate volatility weighed on profit margins. Despite these challenges, several key players managed to outperform.

Leading industrial and energy firms expected to deliver real annual increases in net income and/or EBITDA (FAVÖK) include:

  • Tofaş (TOASO.IS)

  • Enka (ENKAI.IS)

  • Aygaz (AYGAZ.IS)

  • Aselsan (ASELS.IS)

  • Galatawind (GWIND.IS)

  • Aksa Enerji (AKSEN.IS)

  • Coca-Cola İçecek (CCOLA.IS)

Analysts note that although the spread between FX and inflation has narrowed compared to Q2, it continues to constrain profit growth across the industrial landscape.

Services Sector: Retail and Aviation Lead Growth

In the services sector, retail and aviation remain bright spots.

  • Tab Gıda (TABGD.IS) and Şok Marketler (SOKM.IS) are leading performers in the retail space, supported by volume recovery and strategic pricing.

  • In aviation, TAV Havalimanları (TAVHL.IS) is expected to post strong annual EBITDA growth, driven by robust passenger traffic and operational efficiency.

Meanwhile, in telecommunications, both Turkcell (TCELL.IS) and Türk Telekom (TTKOM.IS) stand out as two of the few non-financial firms capable of delivering real annual EBITDA growth—at 7% and 10%, respectively.

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