Welcome, and thank you all for joining our Third Quarter Earnings Call. I hope you are all well. This is Miraç Taş speaking, Group Head of International Banking. I have with me Mr. Muharrem Baykara, Head of Investor Relations, as well as our Manager, Kamer Işık. I'm very delighted to be back and honored to take the leadership of our International Banking Group as we celebrate our 86th foundation year. We are proudly serving our customers, supporting our real sector, creating value for our SMEs, and contributing to the development of the Turkish economy in line with our mission. Halkbank, with its outstanding achievements, stands out as the fourth largest bank in terms of asset size in Türkiye. We are aware that recent geopolitical tensions may pose some additional uncertainty on growth and inflation outlook.
On the flip side, the market-friendly policies have a priority for restoring price stability, normalization in monetary and fiscal policies, stable decline in risk premium, and reduction in risk regarding contingent liabilities such as KKM, are much appreciated by the sector actors in general. I believe that the transition to more market-friendly operating environment will definitely be beneficial for the banking sector. Furthermore, the synchronization of the notable global central banks in rate cuts and the potential positive impacts of the rate cuts on global output will also support the Turkish economy onward. Before moving to our bank, I would like to share a brief view on the Turkish economy. The monetary policy tightening means, in order to rebalance the economy and restore price stability, along with the tightening steps, household demand has started to cool down.
Unfortunately, a lack of strong support from external demand also had a negative impact on GDP growth. Therefore, we expect 2024 GDP growth to be around 3.5% in line with the medium-term program forecast. The central bank has built up the colossal FX reserves and gross reserves to a historical record level with $157.4 billion. Moreover, the current account deficit shows recovery to $11.3 billion level as of August and exceeds all expectations. All in all, the reserve-allocation ratio, which is an important risk factor for the international rating agencies in their rating methodologies, improved beyond market expectations. Therefore, we can see that credit rating agencies will continue to increase Türkiye's sovereign rating and re-rating narrative in new areas will continue to unfold. This inflation process has now started after the CPI peaked above 75% in May.
After the impacts of strong base effects in recent months, headline CPI slipped below the policy rate and entered a positive real interest rate territory in terms of our calculation. We are seeing that economic management is very confident about getting inflation below 20% in 2025. In this context, the economic management underlined that they will coordinate the application of the monetary, fiscal, and income policies. In summary, sooner or later, December or January, CBRT will start to cut the policy rate with the help of the positive real interest rate conjuncture, dramatically improving the current account balance and relevant portfolio inflow. Therefore, looming interest rate cuts will create an earnings growth momentum in our balance sheet due to the high Turkish lira asset composition and increasing fixed interest rate loan share as part of our total loan with high yields.
Let's move to the key indicators of the banking sector. Despite the regulatory environment, the banking sector preferred to remain resilient. On the other hand, normalization of the market rates in the orthodox policy regime has recovered operating environment for core banking activities by contributing to positive margins. 2025 will be the year of benefiting from this shifting in banking trends. All in all, we at Halkbank ended the quarter with comparatively solid financial results despite all the restrictive credit policies and macroeconomic challenges which stemmed from both the weak household and external demand. Looking forward, I can assure you that our journey ahead will continue to be one of progressive growth, collaboration, and full of energy. Now, Mr. Kamer Işık Bey will provide you insights regarding our top quarter performance. Following his presentation, we will be able to address your questions. Thank you very much.
Thank you, Miraç Bey. Let me start with the first page. Total assets increased by 30.8% year over year and amounted to 2.9 trillion TL in the third quarter. The main driver was the solid growth of the securities portfolio. On the TL side securities, we managed to expand by 12.7% quarter on quarter due to ongoing earthquake spending by the Treasury and the high volume of securities issuances continues, while higher TL loan rates put additional pressure on the loan demand. To sum up, the share of total securities in our assets increased slightly to 25.6%. On the flip side, the loan share in our total assets gradually decreased to 48.8% along with the weaker loan growth. On the other hand, the liquid assets share is currently above 20%, owing to the increase in required reserve ratio. On the next page, you may see our securities details.
On the right side of the page, it's seen that CPI linkers' share increased to 43%. CPI linkers' valuation rate was revised down to 55% from 60%. We managed to increase our CPI linkers' income despite valuation rate adjustment. CPI linkers' income reached 28 billion TL in the third quarter due to the following. Firstly, the value effect. The amount of CPI linkers in our portfolio continued to increase with the widening real rates. Secondly, there was more CPI linkers' redemption during the second quarter, while the redemption during the third quarter was lower. So, we saw the effect of those redemptions was much more than it was supposed to be in the second quarter. Finally, average real rates on the CPI linkers' portfolio increased compared to the second quarter.
However, we will see the biggest impact of the revisions in the last quarter because technically all the prior we saw effects accumulated in the last quarter due to the continuing CPI assumption revision through the previous three quarters. Turning to page three, details of loan growth. Total loans were up by 4.9% quarterly, predominantly driven by business loans, mainly in the form of FX loans. As for SME loans, they mostly grew on the standard segment categories and in TL. On total loans, below-sector growth reflects the tight monetary policy, restrictive credit policies, and the weak TL loan demand given the current high rates. The significant loan growth on the FX side offset a mild TL loan growth. Therefore, we have a limited contraction on our total loan market share. The following page shows more details on our loan portfolio.
TL loans make up 73% of total loans, while FX loans make up almost 27%. Our cooperative loans were successfully repriced for not only new utilization but also for the existing portfolio during the second quarter. Since then, we have seen a significant improvement in TL backbook loan yields in Q2 and in Q3 as well. The repricing contribution will continue in the following quarters. Please bear in mind that nearly 20% of our total loan book are comprised of cooperative loans. Structurally, our balance sheet is more TL-enhanced compared to our peer banks. So, we expect earnings growth momentum to be our story in 2025. Asset quality details are on the next page. Similar to the sector, we have also had some NPL inflows during the third quarter. Half of those flows derived from one of NPL. The remaining half of flows were generated by all segments.
Accordingly, NPL ratio deteriorated to 2% from 1.5% in the previous quarter despite no NPL sales. At the same time, our stage two ratio increased slightly to 7.5%. On the top right-hand side, NPL coverage stands at 62.4% in line with the sector average. We maintain our prudent approach to provisioning. Further details on NPL ratios are on the next page. You may see corporate commercial loans' NPL ratio increased, while consumer loans' NPL stayed below the sector. We also witnessed a slight deterioration in SME segments. In addition, we saw an increase in credit card NPL ratios, but their share within our total loan book was almost 3%. Moving to further details of asset quality on page seven, we have not faced any hard landing in the Turkish economy despite the higher for longer approach of CBRT.
As anticipated, risk levels realized below expectations. We released some performing loan provisions. On the other hand, we continued to strengthen stage three provisions during the quarter. As you may see on the left-hand side of the page, our total loan coverage ratio is at a healthy 3% level. Turning to liabilities on the next page. Loan-to-deposit ratio decreased to 61.2%. On the right-hand side table, we see that deposit share within our total liabilities is hovering above 8%. It's a clear signal that Halkbank will be the main beneficiary in the coming quarters given the upcoming rate cut cycle. Only 4.3% of our total liabilities are derived from FX wholesale funding versus sector average of 17.3%. Details of deposits are on the following page. Total deposits are up by 8.2% quarterly and almost 30% on a yearly basis. TL deposits increased by 11.2% quarterly.
In terms of FX deposits in USD, they contracted by 1.4% quarter on quarter as de-dollarization continues. On page 10, we will see further details of deposits. Demand deposits jumped by almost 15.7% quarter on quarter due to the bank's main focus on rising demand deposit market share. Moreover, TRY deposits account for nearly two-thirds of our total deposits. On page 11, cost yields and spread details. Another positive development was that TL core spread returned back to the positive territory after six quarters. Digging deeper, TL loan yields have increased by 241 basis points, while TL cost of deposits declined by 200 basis points. So, our TL core spread improved by roughly 440 basis points. Blended spread improved by 63 basis points. Moving to the P&L item. On page 12, net fees and commissions continued to grow through the quarters.
It grew by 12.9% quarterly and 122% year on year. Both above the inflation rate, mainly due to the continued progress in payment systems. Next page, details of profitability. Total operating revenues are up by 48.7% quarter on quarter, 61.7% year over year, driven by the yearly improvements on net fees and commissions. As you may see in the right-hand side, net trading loss came in at TL 1.7 billion in Q3, while it refers to almost 80% improvement compared to the previous quarter. We reported a net income of TL 2.960 million liras, down by 14% quarterly, implying that ROE came in at 11.3% on the cumulative basis. On page 14, we have cost details. OPEX was down by minus 1.4% quarter on quarter, supported by our efforts on cost cuttings relating to the state saving plan. Now, the solvency ratios.
Reported consolidated CAR came in at 13.9%, up by 33 basis points, while CET1 ratio realized at 10.20%, up by 10 basis points compared to the previous quarter. If we exclude forbearance, CAR and Tier 1 would be roughly 160 basis points lower, and CET1 would be roughly 140 basis points lower than the reported ratios. Those are my final remarks. Now, I will hand over to Muharrem Bey.
Hello, dear guest. This is Muharrem Baykara speaking. Hello, investor relations. Before we proceed to the Q&A session, I would like to touch upon some important issues. We have managed capital buffers well in 2024 by adjusting our loan appetite, optimizing securities portfolio classification, and recovering TL core spreads. Moreover, high risk-weighted asset practice rollback of BRSA in consumer loans also supported our capital adequacy ratio. As of now, we have enough capital buffers.
On the other hand, as announced on the public disclosure platform, we got authorization from our board of directors up to TRY 40 billion sub-debt issuance. We applied for this issuance to the Capital Markets Board of Türkiye. We notified the BRSA too. In addition to regulatory preparations, we are in contact with qualified investors and trying to measure the potential demand. Moreover, internal capital generation will enable us to sustain or even boost our capital buffer through 2025. Our TL core spreads already migrate to positive territory, and potential decline in cost of funding after the looming rate cuts will boost our profitability. Furthermore, we are implementing balance sheet strategies. We are lowering the maturities of deposits and densely granting fixed-rate loans, except overdraft loans and credit cards. Additionally, Turkish lira-denominated asset structure will also generate tailwinds to our profitability. Finally, we are one of the state-owned banks.
As you know, Türkiye Wealth Fund owns the majority of Halkbank's shares. Over the last years, Türkiye Wealth Fund has injected capital proactively when it was needed. Now, we have enough buffers, but if it is needed, Türkiye Wealth Fund stands ready to inject further capital. Now, we can start our Q&A session. If you have other questions, you can push the raise hand button and ask your questions, or you can also type your written questions in the chat area. Thank you. It seems there is no question. Thank you for your participation in our earnings call. I want to thank you again on behalf of our friends, on behalf of our department. Have a nice evening. See you next time.