Akbank’s 1Q25 profit rises, but Citi lowers stock estimates

Published 28/04/2025, 10:26
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Investing.com -- Akbank (IS:AKBNK), a prominent Turkish bank, has reported a net profit of TL 13.7 billion for the first quarter of 2025.

This represents an increase of 49% compared to the previous quarter and a 4% increase year-on-year. The bank’s return on equity (ROE) for the first quarter stood at 22.7%.

Despite witnessing positive trends in the core net interest margin (NIM) excluding the Consumer Price Index (CPI) linker impact in the quarter, the bank’s management admitted that achieving the NIM target for this year would be challenging. This is due to the recent monetary tightening and the likelihood of the risk cost being at the higher end of the projected range of 150-200 basis points.

As a result of these factors, Citi has reduced its earnings estimates for Akbank this year by 16%. The delayed rate cutting cycle, however, has led Citi to predict a better NIM expansion than previously expected next year. This has resulted in a 15% increase in Citi’s earnings forecast for the fiscal year 2026.

Citi has also made a slight adjustment to its earnings forecasts for fiscal year 2027, reducing them by 3%. These revisions in earnings, combined with a higher cost of equity, have prompted Citi to lower its target price for Akbank to TL 70, while still maintaining a Buy rating for the bank’s stock.

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