Türkiye's banking sector posted a 42.7% rise in net profit in 2025, data showed on Friday, despite a prolonged tight monetary policy that has kept most credit restrictions in place to tame inflation.

Sector-wide net profit reached TL 940.18 billion ($21.61 billion), the Banking Regulation and Supervision Agency (BDDK) said.

The sector's total assets expanded 43.6% year-over-year to TL 46.95 trillion, while total loans rose 44.6% to TL 23.13 trillion, according to the BDDK.

The data showed banks generated TL 1.73 trillion in net interest income during the year.

Sector executives have said they do not anticipate authorities to dramatically reduce broader inflation-fighting policies and regulations this year.

Since mid‑2023, tight monetary policy has squeezed lenders' net interest margins, while credit restrictions have raised funding costs and weighed on returns and asset quality, despite banks' strong capital and liquidity positions. Measures included a 2% monthly cap on consumer and vehicle loans, along with limits on SME and commercial lending.

The Turkish central bank has been gradually lowring interest rates and lastly brought the benchmark one-week repo rate to 37% earlier this month.

Inflation ended 2025 at 30.89% annually, the lowest rate since November 2021.

The BDDK data showed asset quality indicators remained relatively stable, with the non-performing loan (NPL) ratio standing at 2.47% at the end of 2025.

The sector’s capital adequacy ratio was reported at 19.69%, well above regulatory minimums.

Total deposits rose 44.1% year-over-year to TL 27.23 trillion as of the end of December.