Are banks profitable?


Banks’ profits exceeded 400% in the first half of 2022 (H1) while manufacturers’ difficulty in accessing finance increased. The interest rate (IR) revenues of the banking sector totaled TRY 538.4bn in H1. TRY 330.3bn consisted of IR revenues. The sector’s IR expenses amounted to TRY 166.9bn and the net IR revenues totaled TRY 163.4bn. The sector’s net IR margin reached 5.5% in H1. The figure points out a significant hike as compared to H1 2021 when profitability stood at 3.93%. The sector’s net profit rose by over 400% to TRY 169.1bn in H1 as compared to H1 2021. Banks, which indicated a TRY 30bn foreign exchange (FX) loss in H1 2021 and TRY 59.5bn FX loss in 2021, made a record profit of TRY 32.1bn from FX transactions in H1 2022. Banks’ return on assets (ROA) and return on equity (ROE) stood at 1.58%, and 15.2%, respectively, on a 10-year average. The annualized ROA and ROE rose to 1.87% and 28.94%, respectively in H1. What about the profitability of manufacturing companies? ROA of firms in ISO Top 500 and ISO Second Top 500 stood at 10.3%, and 9.7%, respectively in 2021. ROE of companies in ISO Top 500 and ISO Second Top 500 was at 35.2% and 25.7%, respectively.

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