Turkiye Garanti Bankasi (GARAN.IS): 3Q26 First Take

Garanti BBVA reported 3Q26 net income of TL33.5bn (+10% qoq and yoy), c.4% above both Matriks consensus and GSe, driven mainly by stronger NII and lower expenses, partly offset by higher tax; 9M26 ROE was 27.3%. Swap-adjusted NIM recovered to 6.2% in 3Q26 from 5.4% in 2Q26 on lower funding costs and disciplined pricing, with the TL loan-deposit spread widening to 5.5%. Management now expects FY26 NIM expansion slightly better than its initial c.75bp guidance, with opex also tracking better than guidance, partly offset by weaker asset quality: 9M26 CoR reached 2.6% (consolidated) and FY26 CoR is now expected slightly above the prior 2.0%-2.5% range, with the NPL ratio up to 4.5%. Performing loans rose 8% qoq and deposits 3% qoq, while consolidated CET1 stood at 12.0%. We expect a positive market reaction. We are Buy rated with a 12-month ROE/COE-based price target of TL170.0, implying 33.5% upside from TL127.30.