Akbank targets 30% Turkish lira loan growth in 2022 amid currency crisis

Akbank TAS is targeting Turkish lira loan growth of 30% in 2022, driven by the small and medium-sized enterprises as well as the consumer segment, amid the ongoing currency crisis in the country, CEO Hakan Binbasgil said during the bank's fourth-quarter 2021 earnings call.

Turkey's central bank reduced its benchmark interest rate by 500 basis points after a series of actions in the second half of 2021. On Oct. 22, 2021, alone, there was a 200 bps reduction. The lira lost nearly 50% of its value in 2021.

The bank's portfolio of lira-denominated loans grew more than 30% in 2021, surpassing its earlier guidance of about 20%, according to the earnings presentation.

Akbank's Turkish lira loans amounted to 221.5 billion lira in 2021, compared to 170.3 billion lira in 2020. The bank's market share at 2021-end was 7.9%, having gained a 30-basis-point market share in lira business loans year over year, mainly led by SME loans.

Foreign currency loans

However, foreign-currency loan growth is expected to remain flattish during 2022, after the bank reported a dip of 5.6% in 2021.

The demand for foreign-currency loans is expected to remain muted, the presentation said.

"We expect the current macro policies to continue," Binbasgil told analysts.

Results

Akbank's 2021 net income rose 94% on a yearly basis to 12.13 billion lira from 6.26 billion lira.

The lender attributed the growth in net income to a significant increase in net trading gains and a decrease in provision for loan losses.

Meanwhile, net income for the fourth quarter of 2021 was 4.78 billion lira.

As of Feb. 1, US$1 was equivalent to 13.38 Turkish lira.