Akbank TAS
IST:AKBNK.E
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Akbank TAS
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Dear friends. This is Hakan here, and thank you very much for joining our second quarter 2022 earnings call. And I hope you are all well. And I have, as usual, Turker, Ebru and the IR team with me.
And before leaving the floor to Ebru, I would like to say a few words about the macro environment that we are in and also our solid second quarter performance. Regarding the macro, challenges do remain both for the world and also for Turkey. And obviously, world is going through a very high inflationary periods, Fed, ECB and other central banks have already started to rate -- started their rate hikes, which means additional challenges to global funding and especially for the EMs. And world -- the economic activity has started to slow down, especially in the second quarter this year and institutions like OECD, World Bank have already started lowering their growth forecasts for the year.
Regarding our country, we still have solid growth. When we look at the GDP growth in the first quarter, it was around 7.3%, and this was due to private consumption and net exports, and CBRT expects robust growth for the second quarter.
Regarding the current account deficit, we have both positive and negative developments. On the positive side, we expect tourism revenues to exceed 2019 levels. So therefore, this year, we may reach around USD 35 billion in tourism revenues. That's actually a significant number. And also on the positive side, if you look at the level of exports so far, it was very good, reaching almost USD 250 billion for the last 12 months.
On the negative side, though, we have high energy and commodity prices, and the likelihood of slowdown in economic activity of our main trade partners, especially Europe, is a potential threat for our exports. And we are likely to end the year with a deficit of around 4.5%.
Inflation is our major problem in the country, and that is driven by high energy costs, high global commodity and food prices, last but not the least, the impact of currency. When we look at the banking sector, banks are healthy, and this new deposit scheme has already exceeded roughly TRY 1 trillion, which is almost like 50% of TL time deposits in the country, and this has help the banks to improve their local currency LDR and extend their deposit maturities.
When we look at the loans, local currency loans were up by 34% at the end of the second quarter. The local currency business banking loans grew by 41% and consumer loans were up around 17%. And when we look at the FX loans, the growth was negative, around minus 8%.
Following BRSA regulations and CBRT macro prudential measures, there has been an increase in both TL funding and lending rates, and there is now some slowdown in loan activity in loan growth.
Regarding our bank, Akbank, despite all the volatility and challenging market conditions, our strategic priorities have always remain intact. And we are one of the best-positioned banks in the same environment. We have robust capital, which is the highest among peers, we have solid liquidity, we have low leverage, we have the highest level of efficiency and we have quite a low operating cost base. And our several years of consistent investments in technology and our people were critical in this. And with our new organization structure, now we have a more holistic, much more analytical approach in our banking practice. And all these have been reflected into our solid numbers which Ebru will share with you shortly.
Despite the challenges, there's a lot of dynamism and motivation at our banks at every level. We had significant customer acquisition, especially over the last 3 quarters and significant market share gains. And we have achieved all high -- all-time high quarterly customer acquisition in the second quarter, and this was 3x that of the same period last year. This resulted in a remarkable 1 million additional active customers year-to-date, which is a record number. And there is noteworthy contribution coming from the digital.
And today, 1 out of 2 new to bank customer was acquired through digital during the quarter. And I'm really very happy for this since we have been focusing on digital for so many years and investing so heavily. And our subsidiaries also did very well. So in short, we position the bank to generate long-term stakeholder value, and our momentum across the board is likely to continue.
And on that note, I'd like to leave the floor to Ebru, who will share the details of our solid second quarter financials. Ebru, the floor is yours.
Thank you, Hakan, and hi, everybody, and thank you for joining our second quarter earnings call. Our first half net income was up more than 5x year-on-year to TRY 21.157 billion. We achieved an eye-catching 4.9% ROA and around 47.1% ROE for the first half. Our quarterly ROA and ROE were even higher at 5.7% and 54.2%. We have also further built capital during the quarter, reaching a robust figure of 18%, and this is without forbearances, which will continue to provide the bank's significant competitive advantage going forward.
Currently just with this outstanding performance as Hakan Bey mentioned, we're across the board and as we had guided at the beginning of the year. That being said, our solid performance so far, which is well ahead of our guidance, has led us to revise our full year guidance for the year. So let's now dive deep into the numbers.
On the loan growth side, our TL loans were up by 39% year-to-date, where our focus remained on maturity mismatch as well as lucrative small tickets. Main contributor year-to-date was business banking, which was up by 50%. In business banking, once again, I would especially like to highlight our success in SME segment, where we actually gained around 100 bps market share among private banks year-to-date. Our new structure implemented at the beginning of the year was the 360-degrees customer-focused organization and comprehensive SME Movement Package, designed to empower SMEs, continue to be supportive factors of the success.
Following our, consecutive market share gains in consumer loans of 160 bps last year, we gained another 60 bps market share year-to-date. Market share gains in consumer segment were across the board, 60 bps in GPLs, 70 bps in mortgages and 300 bps in auto loans.
Due to global uncertainties, while growing, we have been very careful in our maturity mismatch. To that extent, we have an active and variable loans such as CGF, and in the first half of the year, our branded CGF loans have reached TRY 7 billion, and these are all small tickets and all variable. Please note that taking into consideration our first half performance, we have revised our TL loan growth guidance to over 50%.
On the foreign currency side, our foreign currency loans were down by 4% year-to-date. Our market share among private banks has declined by 1 percentage point year-to-date to below 12%. We still observe muted demand for investment loans, and also given the volatile currency environment, we do not expect any change to this trend. And therefore, we now expect a shrinkage in foreign currency loans for the year.
As for the security side, our treasury proactive positioning in CPI linkers continues to work as hedged. The fixed portion of our TL securities stands now at a low 14% due to the increase in TL securities took place in CPI linkers, which are now 77% of the total. Our main purchases took place in January. And after that, we maintained our market share. This portfolio, which equates to TRY 85 billion, is mainly classified under financial assets measured at amortized cost and has reached 86% of total equity. This positioning will help mitigate the negative impact of inflation accounting if when implemented.
As you may remember, our October to October CPI linker valuation estimate was 30% in our guidance, which we had revised, actually, to 35% in first quarter. Taking into consideration the recent trends, as of second quarter, we have revised it to 50%. Every additional 1% CPI will have around TRY 430 million net income, 7 bps NIM and 40 bps ROE impact. Therefore, along with our customer based revenue growth, CPI linkers continue to be a supportive factor for NII. Our foreign currency securities were up by only 2% year-to-date, and worth to note that we are hedged against global rate hikes.
As for the funding side, starting off with the deposits, we maintained our focus on a well-diversified and disciplined funding mix. Deposits continue to be our main source of funding, reaching 63% of our total liabilities. Our TL deposits were up strongly by 65%, increasing its share in our total deposits and resulting in eye-catching 20 percentage points improvement in TL LDR since the beginning of the year to 122%. Our solid customer franchise, customer acquisition, along with new deposit scheme were supportive factors.
The new deposit scheme has reached over 40% of our TL time deposits. The renewal of the ones that have been maturing have been quite strong. Worth to mention also that our sticky low-cost TL deposits and 0 cost demand deposits were up by 46% and 48% year-to-date, respectively. As for the foreign currency side, our deposits were slightly down by 2% year-to-date in dollar terms. However, our solid foreign currency liquidity with an FX LDR of 47% remains as one of our strong muscles, and this has remained flat versus end of last year.
As for the wholesale funding side, we have kept our balanced funding profile along with obviously our foreign currency liquidity. Our second quarter foreign currency LCR was solid at 314%. And our foreign currency liquidity buffer is noteworthy around $13 billion versus our next 12-month rollovers around $3 billion, indicating around 4x liquidity buffer. Of the $3 billion that are due within the next year, $1.4 billion is syndicated loans.
For the second half of the year, we will be in the market for the rollover of our syndicated loan in September. Details will be determined closer to the date, in line with the discussions with our lender banks.
In addition, as usual, due to our ample FX liquidity and low FX loan demand, we may monitor capital markets on an opportunistic basis subject to market conditions, and we will be prioritizing sustainable funding while extending our overall maturity.
On to the profitability side. As for NIM, our dynamic asset liability management and benign funding costs and ongoing asset repricing as well as our strategic and timely positioning in CPI linkers have all contributed to our 293 basis year-to-date NIM improvement to 6.16%. This sales performance is well ahead of our 150 bps guidance that we shared at the beginning of the year. Our quarterly NIM stands at 716 bps.
Looking at our back book and front book lending rate, there is still significant room for asset repricing. As for the funding side, due to tightening global liquidity conditions, as well as macro prudential measures implemented locally, both foreign currency and TL funding costs have already started to trail higher. Still taking into consideration our stellar first half performance, we have revised our full year soft adjusted NIM guidance to around 7%. Please note that our new NIM guidance is also based on 65% October-to-October inflation assumption versus 30% at the beginning of the year.
On the commission revenue side, we further excelled our outstanding performance across the board, and the fees were up by 65% year-on-year, again, well ahead of our guidance. As you can recall, last year in first quarter, we had a one-off commission gain from LYY, and adjusted for that, our year-on-year fee income was even more eye-catching at 72%.
As you can see on this slide, all businesses have positively contributed to the revenue base, indicating the futility of our fee generation. Reasons we got behind this accomplishment are customer-ended solution, leading to customer acquisition, product innovation and diversity, increased transactions, pricing either due to currency or inflation, and obviously, the success of our digital channels have all played a role.
As a result, we have revised our full year fee income growth guidance to around 65%. As Hakan Bey mentioned earlier, once again, we have achieved record high customer acquisition, adding 1 million active customers year-to-date. Our monthly number of customers from which we collect commissions is at all-time high, which also solidifies our fee performance for the coming periods.
Our digital strategy, which is based on our customers' journey, has been a key enabler for us to achieve record-breaking net customer growth for 3 consecutive quarters. As Hakan Bey mentioned, 1 out of every 2 new-to-bank customer acquisition was realized through digital onboarding. Customer growth will continue to be reflected onto our numbers.
Obviously, OpEx is a challenge due to both high global inflationary pressures, as well as pass-through a weaker currency. Still, our relatively low cost base versus peers, gives the bank significant competitive advantage and a lot more flexibility. With our solid revenue generation, cost-to-income ratio further improved to a historical low level of 18%. This level is obviously not sustainable in the long term. That being said, taking into consideration our first half performance, we have revised our full year cost-to-income ratio to below 25%.
On to asset quality. Our loan portfolio continues to perform well. Year-to-date, there hasn't been any net inflow into stage 2 when excluded for currency impact. And as you know, foreign currency provisions are hedged for Stage 2. Therefore, our Stage 2 declined to 7.8% of gross loans, down 2 percentage points year-to-date. I would like to underline that the repayment performance of this portfolio remains strong.
As for Stage 3, the inflows were broad-based and collection performance remained very robust, while our net NPL inflow was at only TRY 95 million. Going forward, we do not expect a material increase in NPL inflows, and therefore, have revised our April guidance to below 4% for the year.
Our cost of credit evolution underlines our proactive provisioning, as well as our healthy loan composition. We had a model update in both first quarter and second quarter, and these had 20 bps impact on the first half cost of credit. Solid repayment, especially ongoing strong collection performance, as well as improved collateral values, all have contributed to positively to our cost of credit evolution. As a result, our first half net cost of credit, excluding currency, has remained at 51 bps, a very low level, underlining our strong discipline to the cycle.
Including currency impact, our net cost of credit would be at 85 bps, but as I mentioned, things are hedged and do not have P&L impact. Despite our solid loan growth, coverage ratio for Stage 1 remains flat versus year-end, but has increased slightly for both Stage 2 and Stage 3. We believe our significant provision builds will limit the need for additional provisions going forward. However, to be on the conservative side, we maintain our around 100 bps net cost of credit, excluding currency impact guidance for the year.
Our record high profitability has also reflected on to capital position as our internal capital generation has added 323 bps to our total capital year-to-date. Excluding BRSA forbearances, our total capital further improved by 30 bps to 18%. Compared to year-end, our total capital is up by 80 bps. Please note that this improvement was despite the repayment of Tier 2 in first quarter and also significant growth.
Also, I would like to underline that 100 bps year-to-date improvement in our Tier 1 and core equity ratios add to 14.7%. Our solid capital buffers serves as a shield against unprecedented challenges and volatility and also creates significant ammunition for sustainable profitable growth. Our important competitive advantage on the capital side continues at full pace.
On the next slide, you will see here the summary of our financial performance. I'm very happy to share that we have outperformed on every metric, which has led us to revise our full year guidance, resulting in a revised full year ROE of 50%. And now, Turker, the floor is yours for inflation accounting.
Thank you, Ebru. Hi, everyone. First of all, there have been no update on the regulatory front with regard to switching towards inflation accounting in Turkey. So we are following the developments on the regulatory side. However, we have started to prepare ourselves on the topic and working on the calculation details.
So therefore, I see here, we want to share with you our initial impact analysis on first half results. If had applied inflationary accounting in the first half, our ROE would have been around mid-single digit levels compared to our reported ROE of 47%. On the other hand, the capital because ratio impact, would have been positive in inflation accounting. Just to keep in mind, this ROE calculation excludes tax income from net monetary loss due to current like local tax legislation. Adjusting for this impact, our restated ROE would increase to mid- to high teens. As I said, our details work is still ongoing. And in the coming period, we hope to share more details with you. Back to you, Ebru now. Thank you.
Thank you, Turker. And before moving on to Q&A, I'd like to share briefly some key highlights of our ESG performance for the first half.
In line with our long-term sustainability vision, we have continued to take concrete steps in order to further integrate sustainability into the way that we do business. And to start off, we provided TRY 23 billion ((sic)) [ TRY 13 billion ] of sustainable finance in the first half, which is actually making us moving closer to our long-term target of TRY 200 billion. Our impact-driven approach on sustainable finance was also recognized by Global Finance, with 2 regional and 1 country award, including Leader in Sustainable Finance for the Turkish category.
And on the ecosystem side, we have also, obviously, continued to support that side as well. We provided both financial and nonfinancial support to SMEs, which are key drivers of growth and employment generation in Turkish economy. And in the second quarter, we launched -- we actually launched a SME Eco-Transformation Package, and this offers like 7 different products to help SMEs achieve green transformation. This package also includes campaigns to boost awareness among SMEs and guide them in their green transformation journey.
As for the community side, as you know, that this supporting committees is a part of Akbank's DNA. And in that respect, Akbank Youth Academy, upskills 11,000 young people for the job market with important partnerships.
Climate change is an area that we are also focusing on. And as we have previously mentioned, we have also started a very crucial transformation project to further integrate E&S issues into our living practices. And during second quarter, we have updated our E&S Risk Framework & Procedures in line with best practices and international standards and the needs of the stakeholders. And also to fight climate change and help the environment, we have published our environmental policy, outlining our approach to our direct and indirect environmental impact and commitments and practices.
And on that note, this actually concludes our presentation. We can now move on to the Q&A session. Please do raise your hand or type in the question box -- your question in the Q&A box. And for those who are joining us by telephone, please do send your questions by e-mail to investor.relations@akbank.com.
And the first question comes from Gabor.
My first question would be on the inflation accounting. Yes, you are expecting or you are guiding for an ROE adjustment under this regime. Can you give us a sense what would be, if any, impact on your recurring ROE from moving to inflation accounting?
And then secondly, your margins are clearly trending very strongly, and you are guiding for 7%. Where would you expect your margins to settle as this is clearly well above the historical levels? So let's say, starting from next year under your baseline inflation assumptions.
And maybe just a final question on your 100 basis point provisioning guidance, I'd like to understand a bit better to what extent is this related to conservatism and to what extent to a possible economic slowdown in the second half that you are still guiding for around 100 bps up to much lower levels in H1?
Thank you, Gabor. Maybe Turker, you'd like to start with the inflation accounting and then we can move on.
Yes, sure. Gabor, actually it's a very difficult question. But what I can say for this year is actually, we will surely aim to maintain this inflation adjusted ROE for the full year, again, to repeat for the first half of the year, it was -- it's calculated -- there is calculation so detailed work is still going on. We are talking rather like mid-single-digit ROE for the first half of the year. So we want -- we will aim to maintain it for this year.
For the coming years, sure the developments will be important to actually how the inflation will develop. So it's actually a little bit too early to comment on that. But surely, as I can say, actually, we would like to achieve positive ROE surely. So beating the inflation in the other sense.
Maybe with regard to spread forecast, you are right, actually, maybe this is historic highest we are observing -- the highest net interest margins historically for a very long time.
When we look at the trends both on TL and FX side. On the TL side, based on the repricing of both assets and deposits, we may expect further improvement on the TL core spread side, whereas on the FX side, which is making up roughly across 50% of the balance sheet, we may expect to see some contraction because of higher deposit cost as well as because of expected increases on the wholesale funding side. So therefore, we may expect to keep net interest margin at similar levels without reflecting the additional in the CPI linker impact. Just to repeat, in our revised guidance, we have assumed inflation to be 65% for CPI linkers. So with that, we are coming to 7% level.
So when adjusting for that, so we can say net interest margin to stay at similar levels for full year. Again, for next year, it's a bit too early. So we will work on the forecast in the coming periods.
Last question was on provisioning, Turker, 100 basis point provisioning...
Yes, 100 basis points -- the first half results was back 50 basis points. So as Ebru has mentioned, so because of conservatism actually, and so we want to stay prudent on that side. So we have, therefore, actually kept our cost of credit guidance. As Ebru has also mentioned, in the first half, we have made some model adjustments in our IFRS 9 calculations. In the second half of the year, we may again revisit our models, looking at the global development actually global economic forecast, et cetera. So therefore, we may again make further revisions, therefore, actually we want to keep it unchanged.
Just a quick clarification. So in the 2022 guidance, you are assuming a 65% and year-end CPI?
We can say October.
October CPI?
Yes.
For the CPI linker income, you are now assuming only 50%?
In the first half, yes, we have -- in the second quarter, we have increased it to 50%, and we are reflecting the whole impact in second quarter results. But in the full year, in our guidance, we have assumed 65%. So therefore, with 65%, we are coming to this around 7% net interest margin guidance.
Yes. So therefore, the additional income has not reflected into our numbers, just to underline that.
And the next question comes from Sam.
I really appreciate the call. I've got a couple of clarifications and then another question on your client acquisition. So firstly, I understand that as far as inflation accounting goes, you are required to move to inflation accounting under IFRS reporting standards. But are you actually required to publish those IFRS accounts?
Sam, actually, yes, actually, our practice so far has been to publish semiannual IFRS reports in our website, but this IFRS report comes with some delays maybe towards the end of the third quarter. And, therefore, actually, in this report, it may be the case. So it's highly probable that we switch to inflation accounting.
Okay. Perfect. And then if I look at your NPL formation, so on Page 64 of your consolidated accounts, it actually does look like there has been a significant NPL inflow of TRY 13 billion, but then it commenced your write-off. Could you explain that to us, please?
As you may remember by the end of the first quarter, we had actually sold the Turk Telekom shares to Turkish Wealth Funds by the end of first quarter. But as a result of this transaction, there had been some repayments for our existing LYY loan, but the remaining part of the LYY loan was still in our books. And at the end of the second quarter, in the accounting, we have witnessed this remaining part. Therefore, actually, this write-off accounting exercise has created an inflow and write-off net impact was 0.
So therefore, in order not to disturb the strength, we have excluded in this NPL evolution. Because as you may remember, this LYY asset was not booked under loans. It's not a financial instrument at fair value in our financials. But in order to write off it, we had to make it through NPL accounting, NPL accounts.
Okay. Perfect. And then the third question is on the eye-catching 1 million customers you have acquired this year-to-date, sorry. I wanted to get a sense of how many of those customers are new to banking versus customers that you are acquiring from your competitors? And do you have a sense of how many of those 1 million you would actually be the primary banking provider for? I suppose I'm just trying to sense what the remaining pool of potential clients is and how long this trend of really strong client acquisition can continue?
Maybe can Hakan Bey -- the phone to you.
Yes. Thank you for that question. I think this is a very strategic one. So when we say 1 million additional active customers, so we are actually activating some of the existing customers in the bank, and also, we are actually acquiring new customers from outside. So just to give you a rough idea, I can say, like 50-50, maybe it's more acquiring, maybe 60-40, but there is some activation as well.
So when we look at the customers that we are acquiring from outside, it's actually across the board. So it is from other banks. So also, we have some customers actually entering into the system for the first time. So we are also pretty strong on the young, actually, population. So we have been really investing significantly on that through the banks and also through our subsidiaries. So we are actually -- so I cannot say that we came up with that proposition and so on, and that is how we gain customers so that there are, actually, maybe hundreds of different, actually, analytical approaches. So there's a lot of science behind us. So there's a lot of actual machine learning, there's a lot of AI underneath this. And of course, digital channels.
So as I said, at the beginning of the presentation, there is a significant contribution coming from the digital. And also, I also have to tell you this, Sam, at the beginning of this year, we made an organizational change in our bank. So as I said at the very beginning, so the bank has been investing so much on the digital front. And we said, look, we don't have -- we don't need this digital banking division anymore, because now the whole bank is digital.
So there is also a big philosophical change in the bank. So that also has a great contribution to this. So there is much more focus around the customer, 360 degrees end-to-end actually processing marketing. So on the marketing side, so I think we are managing our marketing budget and also more analytical, more wisely. So as a result of this, I think that there is this big achievement in the bank.
So for how long will this continue? I think I have the impression that this will continue quite a while. So it's not like putting a lot of marketing budget and so on and then buying customers. So it doesn't really happen that way. So I think what we are doing now is something sustainable, achievable, which we can continue for a long period of time. So it's not really targeted to 1 set of products or services. It's not like we come up with the promotion and then we acquire like lending customers, deposit customers and so on. So it's not something like it.
So bits and pieces everywhere. So systematically, I think the bank is doing a fantastic job. So I'm really very happy with this. So -- and at the end of the day, it is all up to the people and the technology and the infrastructure that we have. So we have been investing so much.
Thank you, Sam. I guess there's a written question. Maybe someone would like to...
Yes, we have 1 or 2 questions. Currently, the consensus [ wheel ] is that the call level subordinated Tier 2 bonds will not be called by Turkish banks on their call dates. What's your take on Akbank's future bonds callable in April next year?
Hakan?
So yes. Maybe I should answer this question. So now if you look at the -- what we have done in the past, this year, we call the bonds, Tier 2 bonds. So this April next year, it is a relatively small amount for us. I think something like USD 400 million. Still, we have some time. So the intention of the bank is, of course, to repeat the same. We have excess liquidity, FX liquidity. But of course, we have to take a permission from the regulator. So -- but still, we have a lot of time. But if you look at what we have done in the past, we called out Tier 2, and we have a lot of FX liquidity.
Thank you. Valentina, you are next. Please ask your question.
Thanks a lot for the presentation and congratulations on the good results. My first question is on your FX liquidity. Can you please give us a breakdown of the FX liquidity? I'm just trying to get a sense of how much of the $12.6 billion that you have inside/outside Turkey. And then also, I wanted to ask about your plans for the $3 billion short-term dollar maturities. I guess, refinancing of your senior Eurobond during October will be challenging given the current market conditions. So do you plan to pay, refinance later on your syndication loans? What is your target for the rollover? Any color on the FX funding outlook and trends will be very, very helpful here.
And then finally, on the hyperinflation accounting, I was just wondering what annualized inflation you use when you were making the calculations on -- I forgot which slide it was. I think it was Slide 19. Yes, 19.
Yes, Hakan Bey, you may start, and I can go on.
Yes. Maybe you also contribute to answer this question. So let me give some feedback regarding the short-term USD 3 billion short-term actually payments. So now we have the $700 million syndication coming in October. So again, it is too early to say. But we never had issues in the past in our rollover. So I think it's going to be the same for our bank. But the price actually will also be important. So the maturing syndication, it was like LIBOR plus $215 million. So our rollover and the percentage, I think, will also be depending on the price that we get.
And also in October, we have $500 million Eurobond that is maturing. So now we have this intention to pay this Eurobond because when you look at the actually ongoing Eurobond prices in the market, I think it is extremely expensive for us, given the level of high CDS levels of the country and the bank has a lot of FX liquidity. So we would like to pay this.
And also on the liquidity side, apart from this excess liquidity, FX liquidity that we have, and we also have some Eurobonds on the asset side, Eurobonds, that will be maturing as well during the same period. So I mean, that is also on top of the liquidity that we have. So this is some additional information, which I would like to share with you.
Maybe, Turker, you can contribute.
Yes, Hakan Bey. So the other part of the question was with regard to the composition of the FX liquidity buffer. So around -- so as we also shared in the footnote, this liquidity is comprised from our FX reserves under [indiscernible] our slot transactions, money market placements and CBRT eligible securities. So around $3 billion of this amount is our money market placements USD 3 billion offshore. Like USD 6 billion is our swapped transactions, majority of which is Central Bank, but we also have some long-term offshore swaps. And the remaining one, the remaining portions, mainly are unencumbered securities.
There was another question with regard to this, the inflation assumption we have used. As you may remember, as you know, in the first 6 months, actual CPI was around 42% in Turkey. So we have used this for 2% for the restatement of nonmonetary items. And also in order to have a consistency, we have also adjusted our CPI linker valuation to that figure so in order to, as I said, to have a consistency. I hope I haven't missed any question.
So just to repeat financing, I mean, I had shared earlier as well for this year, for example, we're expecting, obviously, a shrinkage in our FX loans. So the shrinkage in FX loans, obviously, also is another thing that will create liquidity for the bank, obviously, as well. And also, when you look at our ALM management, we have again, on the asset side of maturing Eurobond as well to pay back the Eurobond on the liability side. And actually, at the beginning, anyways, this was planned to be paid back. So it wasn't like there's a change of plan. So overall, the bank, if you look at the liquidity buffer, et cetera, I mean, we're very well, I would say, positioned for the current environment.
I guess we have some more written questions. Maybe Burcu, you'd like to ask?
Sure. One further written questions from Bulent Sengonul. Please repeat the tax impact of monetary losses on your inflation adjusted ROE? Yes. And can we take this levels at sustainable levels going forward, he asks?
Just to be -- as I said, so when we -- in our first initial calculation, we are calculating the ROE at mid-single digits. As you know, in Turkey, in tax registration, monetary loss is currently not tax deductible. So if it would have been tax deductible, this mid-single-digit ROE would increase to mid- to high-teens ROE, so roughly, you can say, around 10% ROE impact, we can say, for the first half results.
Going forward, so it's a bit too early to comment on that. So where it's settled, but surely, we will aim to reach positive ROE in inflationary accounting. So also the trend of the inflation will also impact that and to overall profitability.
Thank you, Turker. Once again, if you have any questions, you may raise your hand or else, I'm going to give the floor to Hakan Bey for closing remarks, and thank you all for joining us and hope to see you all soon. So Hakan Bey, maybe you can do your closing remarks?
Yes. Thank you, Ebru. So to summarize, I think there's a lot of momentum across all business lines in the bank and also subsidiaries actually, especially in customer acquisition, growth, core revenue generation. It's not only the CPI linker, but the core revenue generation as well. So as I have been repeating like in every meeting, Akbank is actually exceptionally well positioned for strong financial results despite the challenges actually. And also, this is also true for the coming years.
And I'm proud of our, actually, excellent balance sheet management, robust capital, solid liquidity, highest level of efficiency, outstanding talent and technology. And Ebru, as you have mentioned in your presentation, we will continue to support our ecosystem on the transformation to the part of a greener and more inclusive actually economy.
So obviously, we have some challenges globally and locally, but we have been actually through many, many cycles, and I have full faith actually in our people's capacity and execution quality. And I would like to once again express my gratitude for their exceptional efforts.
And last but not the least, I would also like to thank all our stakeholders, our investors, for their consistent trust and confidence in us. So keep well and see you all again soon, hopefully physically. Thank you very much.
Goodbye.