Business · Companies · 7 hrs ago
BBVA expects Turkey unit Garanti to contribute €2bn a year by 2030
BBVA expects its Turkish subsidiary Garanti to contribute €2bn a year to the bank group's net profit once conditions improve.
That goal is now expected to take longer because Turkey's inflation outlook is worse than BBVA had forecast.
The bank had expected to stop using hyperinflation accounting for Garanti in 2028, but now sees 2030 as the most realistic date.
Hyperinflation accounting affects how Garanti's results are reflected in BBVA's accounts, and the bank says easing price rises would reduce the penalty.
Turkey's inflation was 31% in 2025, and BBVA expects it to remain around 30% in 2026; the 2028 presidential election could also bring more government spending and add to inflation.
Garanti is estimated to contribute €1bn in 2026, half the annual contribution BBVA is targeting later.
BBVA says that estimate carries downside risks, and the timing of any improvement depends in part on Turkey's central bank and its interest-rate decisions.
BBVA expects its Turkish subsidiary Garanti to contribute €2 billion a year to group profit once inflation conditions improve.
The bank has pushed back its expected end date for hyperinflation accounting in Turkey from 2028 to 2030.
BBVA estimates Garanti will contribute €1 billion in 2026, twice the amount it expects for this year.
Turkey’s inflation was 31% in 2025, and BBVA forecasts it will be around 30% in 2026.
BBVA says the 2026 contribution estimate carries downside risks, depending partly on the Turkish central bank’s actions on interest rates.
- Who
- BBVA and its Turkish subsidiary, Garanti.
- What
- BBVA expects Garanti to contribute €2 billion a year to group profit once inflation conditions are more favourable.
- When
- By 2030, according to BBVA’s latest forecast.
- Where
- Turkey.
- Why
- A more favourable inflation environment would reduce the accounting penalty on Garanti’s results.
This story does not have two clearly opposing sides.
Turkey’s inflation rose 31%.
BBVA forecasts inflation of around 30% and estimates Garanti will contribute €1 billion for the year.
Turkey is due to hold presidential elections, which BBVA says could lead to fiscal expansion.
BBVA now expects Turkey to end hyperinflation accounting.
- Expected Garanti contribution by 2030
- €2 billion a year
- Estimated Garanti contribution for 2026
- €1 billion
- Turkey inflation in 2025
- 31%
- BBVA inflation forecast for 2026
- Around 30%
- Expected end of hyperinflation accounting
- 2030
What people are saying
downside risks