Message from the CEO
Looking at 2024 from a general perspective, the global economy was driven by the policies of central banks. Interest rates were raised to combat the rising inflation caused by the pandemic. Inflation figures regressed as a result of these efforts and interest rates started to fall in many developed and developing countries, especially in the US and European Central Banks.
The presidential elections held in the US in November and Trump's victory marked one of the major events of 2024 and will probably remain one of the important issues for the next 4 years. While Europe has been quite successful in reducing inflation, sticky prices in the US and Trump's policies that could lead to price increases have caused the FED to be more cautious in cutting interest rates. Despite the progress achieved globally in terms of inflation and employment, growth data is still lagging behind the pre-pandemic period. Wars, geopolitical tensions, and climate issues continue to threaten the world economy.
With the recovery in trade in goods, global trade volume growth increased from 0.9 percent in 2023 to 3.4 percent. China, the US and East Asian economies displayed a strong export performance in machinery and electronics, whereas Europe suffered massive declines. The value of exports from Africa and Latin America declined as commodity prices weakened. On the other hand, trade in services grew by approximately 6.4 percent in 2024, representing almost 25 percent of world trade now. Meanwhile, international financing activities, which had been stagnant since 2022, grew in 2024. Total USD and EUR lending outside companies' home currencies reached the 2021 peak of USD 17,7 trillion in the second quarter of 2024. Market conditions for international debtors were eased by interest rate cuts applied by major central banks.
Political developments in the EU were at the center of the markets. In France, the failure to reach a consensus on the 2025 budget resulted in the fall of the Barnier government following a vote of no confidence. Similarly, the current government led by Scholz in Germany, the region's largest economy, fell due to its failure to win a vote of confidence, resulting in the decision to hold general elections in February 2025. Final GDP data for the third quarter of the year presented a relatively positive outlook in the EU, while ECB President Lagarde stated that they were very close to bringing inflation to 2 percent in a sustainable way in the medium term.
At its December meeting, FED cut its policy interest rate by 25 basis points to 4.25-4.50 percent in line with expectations. The statement “The FED carefully monitors risks” in the resolution text published after the meeting, as well as the lack of unanimity for the decision to cut the policy rate showed that inflationary pressures still persist. FED members' core PCE inflation forecast for 2025 year-end rose to 2.5 percent from 2.2 percent in September projections. In this context, FED officials, who had predicted four interest rate cuts each of 25 basis points in 2025 in their September projections, revised their forecasts as two. As the US dollar grew stronger, a general decline was observed in prices of precious metals and industrial metals.
In China, on the other hand, CPI data for 2024 demonstrated the continuance of the weak course in consumption expenditures. In line with the ongoing crisis in the housing sector, housing prices continued to decline throughout the year. It was observed that despite the major incentive steps taken by Chinese Central Bank in the last quarter to meet its growth target, the sufficient rate could not be achieved.
While all these developments were taking place in the world economy, we closed 2024 with a consumer inflation rate of 44.38 percent in our country. In parallel with the decline in inflation compared to January 2024, the Turkish economy grew by 2.1 percent year-on-year in the third quarter of the year. While this growth contributed to the fall in the unemployment rate, the seasonally adjusted unemployment rate decreased by 0.5 points to 8.8 percent. The Central Bank started 2024 with interest rate hikes and continued to support TRY both through the policy interest rate and other instruments throughout the year. The policy interest rate was raised to 50 percent immediately before the local elections in March and remained at this level for the whole year before being cut by 250 basis points to 47.5 percent at the last MPC meeting of the year on December 27. Central Bank officials stated that the tight policy stance will be maintained with a data-driven approach. The positive trend in our economy was also supported by foreign rating agencies’ rating upgrades, making us the only country to receive a rating upgrade from three major credit rating agencies.
As NurolBank, we continued to support the sustainable growth of our country with our solid financial data and qualified employees in both global and local economic climates in 2024 as we have done every year. In 2024, we increased our loan size to a total of TRY 29.5 million. We increased our net earnings to TRY 4.476 million. Our Bank’s data for 31 December 2024 indicated our Capital Adequacy Ratio as 20.19 percent. Our Bank also issued TRY 22.7 billion worth of debt instruments in total at competitive prices during the year.
Our subsidiary, Ortak Varlık Yönetim A.Ş. acquired a portfolio of non-performing loans with a total principal amount of TRY 5.2 billion in 2024, reaching a principal amount of TRY 8,6 billion and a total receivable size of TRY 14.5 billion. Its number of clients increased to 350 thousand. Continuing to grow at an accelerated pace, Ortak Varlık succeeded in becoming one of the top five companies in the sector in terms of size in a short period of four years.
Another subsidiary of our Bank which had a successful year in 2024 was Nurol Portföy Yönetimi A.Ş., with a portfolio size that increased by 431 percent compared to the previous year (2023) and reached TRY 53.292 billion. Its number of funds increased from 33 in the previous year to 40 in 2024, while its net profit approached TRY 42.5 million.
Our valuable employees have contributed to all these successful financial results in 2024, in which we celebrated our 25th anniversary.
I would like to thank our shareholders for their confidence in us, our employees for their strong performance and all our other stakeholders for standing by us.
Özgür AltuntaşBoard Member and CEO