BIST100 4Q25 outlook: Banks lead earnings growth as risks mount
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Fourth-quarter 2025 results for BIST100 companies point to strong profitability in the banking sector, while non-financial firms continue to face pressure from high financing costs and weak demand. Although the broader disinflation narrative remains intact, rising geopolitical risks are beginning to cloud the outlook for margins and growth in 2026.
More companies report losses despite mixed recovery
A total of 45 companies in the BIST100 index reported losses in the fourth quarter of 2025, up from 37 in the same period last year.
However, there were also signs of recovery:
- 12 companies that posted losses in 4Q24 returned to profitability
This mixed picture highlights ongoing fragility beneath improving headline figures.
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Revenue and operating profits increase
Among non-financial companies:
- Total revenues reached TRY 3.09 trillion, up 5% year-on-year
- EBITDA climbed to TRY 367 billion, marking a 39% annual increase
Despite this improvement, performance relative to expectations was uneven:
- Of 22 non-bank companies with forecasts
- 13 missed expectations
- 9 exceeded expectations
Banking sector outperforms expectations
Banks delivered the strongest results in the quarter:
- Net profits came in 13.5% above expectations on average
- Year-on-year profit growth: 53%
- Quarter-on-quarter growth: 33%
Key drivers included:
- Improved loan-deposit spreads
- Higher returns on inflation-linked securities
- Strong fee and commission income
- Controlled cost of risk
Looking ahead, margins are expected to remain supportive, though rising funding costs due to geopolitical tensions could pose risks.
Insurance sector maintains momentum
The non-life insurance segment continued its strong performance:
- Annual profit growth reached 51%
The sector benefited from:
- Expanding underwriting margins
- Robust investment income
Non-financial sectors face cost pressures
High financing costs remain a key headwind for non-financial companies.
Sectors under pressure include:
- White goods
- Electricity
- Food
These industries are grappling with:
- Rising input and production costs
- Weak demand conditions
- Declining electricity prices (in the power sector)
In white goods:
- Sales declined by 19% year-on-year
- EBITDA fell by 4%
- Net losses persisted
The energy sector also saw EBITDA contraction, while remaining in loss territory.
Strong performers: Steel, telecom, refining
Several sectors stood out in terms of operating profitability:
- Steel
- Telecom
- Beverages
- Refining
In steel:
- Investment activity and pricing supported margins at Erdemir
- Value-added production boosted performance at Kardemir
Telecom maintained its defensive profile, while strong product margins and higher oil prices supported refining profitability.
2026 outlook: Core narrative intact, risks rising
The broader macro framework remains largely unchanged:
- Disinflation is expected to continue
- Gradual economic recovery remains the base case
However, recent geopolitical developments introduce new risks:
- Inflation trajectory could deteriorate
- Current account pressures may intensify
Additionally:
- Expectations of declining funding costs are weakening
- Risks to bank profitability are increasing
Sectors to watch
In the current environment, the following sectors appear relatively resilient:
- Insurance
- Refining
- Food retail
These sectors benefit from stronger margins and more stable demand dynamics.
Garanti BBVA Invest report
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