We Read a Financial Giant’s 2025 Audit Report: Here are 5 Surprising Insights

Introduction: The Hidden Stories in Financial Reports

Corporate financial reports are often seen as dense, impenetrable documents, walled off by jargon and endless tables of numbers. They are the kind of thing most people are happy to ignore. But hidden within these formal filings are fascinating stories of immense growth, calculated risks, and the fundamental truths that define a business.

This is exactly what we found in the 2025 independent auditor’s report for Garanti BBVA Factoring, a major Turkish financial company, which was signed by the global auditing firm Ernst & Young (EY) on January 30, 2026. The report is a formal assessment of the company’s financial health. But beyond the accounting-speak, it reveals a business operating at an extraordinary scale and speed.

We’ve read the entire document so you don’t have to. Here are the five most impactful and surprising takeaways, distilled into clear, understandable points.

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1. The Company More Than Doubled in Size—in a Single Year

The most striking takeaway from the report is the company’s explosive growth. In just one year, Garanti BBVA Factoring’s total assets grew by a precise 152.1%. This signifies an extraordinary rate of expansion and business activity.

The numbers, presented in thousands of Turkish Lira (meaning the actual figures are in the billions), tell a clear story:

• Total Assets (2024): 13.3 billion TL (13,300,378 Bin TL)
• Total Assets (2025): 33.5 billion TL (33,535,881 Bin TL)

To more than double the entire asset base of a multi-billion Lira company in a single year is a rare feat. A surge of this magnitude is rare, and it raises an immediate question: what, precisely, is this company doing to grow so fast? The answer lies in its almost fanatical business focus.

2. It’s a Laser-Focused Business—And That’s an Understatement

So, what is driving this staggering growth? The report reveals that the company is not a diversified financial services firm but a highly specialized machine dedicated to one core activity: factoring. And its focus is absolute.

According to a fact explicitly stated in the auditor’s report:

• Fact: As of December 31, 2025, factoring receivables constitute 96% of the company’s total assets.

Factoring is a financial service where a business sells its invoices (accounts receivable) to a third party at a discount. This provides the business with immediate cash to run its operations, while the factoring company takes on the responsibility of collecting the payment from the original customer. This single data point is impactful because it shows that Garanti BBVA Factoring is a pure-play specialist, with nearly its entire value and operational focus tied to the business of buying and collecting invoices.

This extreme specialization is the engine of its growth, but it also concentrates nearly all of the company’s risk into a single point of failure: the possibility of unpaid bills. As we’ll see, this is exactly what caught the auditor’s eye.

3. Profits Grew Dramatically, But Expansion Outpaced Earnings

This massive expansion in assets was also highly profitable. The company saw a dramatic increase in its net profit for the year, demonstrating that its growth was not just for scale, but was also adding significant value to the bottom line.

The net profit figures were exceptionally strong:

• Net Profit for the Period (2024): 1.44 billion TL (1,438,088 Bin TL)
• Net Profit for the Period (2025): 2.13 billion TL (2,130,075 Bin TL)

This represents a 48.1% increase in profitability year-over-year. This highlights a key dynamic: while the company’s asset base grew by an astonishing 152.1%, its net profit grew by a still-remarkable but more modest 48.1%. This suggests the company is in a phase of aggressive market capture, prioritizing scale and asset deployment, even if it means a slightly lower immediate profit margin on its newer business.

4. The Auditor’s Single “Key Concern”: The Risk of Unpaid Bills

In every audit of a major company, the independent auditor identifies the areas that were most significant and required the most complex judgment. These are called “Key Audit Matters.” They are not problems, but rather the points of highest focus for the audit team.

For Garanti BBVA Factoring, the auditor (EY) identified only one: “Inclusion of impairment for financial assets in the financial statements and related significant disclosures.” Let’s decode that accounting-speak: ‘impairment’ means an asset losing value, and their main ‘financial assets’ are the invoices they’ve bought. In simple terms, the auditor’s biggest focus was on making sure the company had properly estimated and accounted for potential losses from customers who might not pay back their debts. This is often referred to as “expected credit losses.”

This singular focus makes perfect sense. When a company’s entire business model—all 33.5 billion TL of its assets—is built on the premise of collecting on invoices, the auditor’s most critical task is to scrutinize the one risk that could bring it all down: the risk that those invoices don’t get paid. The auditor spent the most time and effort here, scrutinizing the models and assumptions the company used to predict and prepare for potential defaults.

5. An Auditor’s Clean Bill of Health Isn’t a Guarantee

The auditor ultimately gave the company a “clean” or “unqualified” opinion, which means that, in their professional judgment, the financial statements are presented fairly and accurately in all material respects. However, a common misconception is that a clean audit opinion means the company is risk-free or that the numbers are 100% perfect.

The report itself contains a crucial clarification that pushes back against this idea. In the “Basis for Opinion” section, the auditors make their role crystal clear with a statement that translates to the following:

“Reasonable assurance obtained as a result of an independent audit… is a high level of assurance, but it does not guarantee that an existing material misstatement will always be detected.”

This is a critical insight into how financial oversight works. An auditor’s job is to provide reasonable assurance that the financials are free from material (i.e., significant) errors, not to provide an absolute guarantee of perfection. It’s an assessment based on evidence and professional judgment, not a prediction of future success or a promise of infallibility.

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Conclusion: A Story of Growth and Vigilance

Garanti BBVA Factoring’s 2025 report tells a clear and compelling story of explosive, profitable growth built on a hyper-focused business model. It is a snapshot of a financial machine running at full speed, more than doubling its size in a single year.

Yet, as the auditor’s report carefully points out, this ambition is built on a foundation of inherent risk—the simple but profound risk of non-payment. This risk is the primary focus of the independent auditor’s scrutiny, a constant reminder that vigilance is the partner of growth.

Garanti BBVA Factoring’s story reveals a fundamental tension: its explosive growth is inseparable from its concentrated risk. The question for its future isn’t just if it can keep growing, but whether its vigilance in managing credit risk can keep pace with its ambition.

Briefing Document: Garanti Faktoring A.Ş. 2025 Independent Audit and Financial Review

Executive Summary

This document synthesizes the findings from the independent audit and financial statements of Garanti Faktoring A.Ş. for the fiscal year ending December 31, 2025. The company demonstrated exceptionally strong growth in its core business, resulting in a significant expansion of its balance sheet and a substantial increase in profitability compared to the prior year.

The independent auditor, Güney Bağımsız Denetim ve SMMM A.Ş. (a member firm of Ernst & Young), issued an unqualified (“clean”) audit opinion, affirming that the financial statements are fairly presented in all material respects. The auditor identified the impairment of financial assets as the Key Audit Matter, reflecting the critical importance and complexity of calculating Expected Credit Losses (ECL) for the company’s factoring receivables, which constitute 96% of its total assets.

Financially, Garanti Faktoring A.Ş. achieved a net profit of 2.13 billion TL in 2025, a significant increase from 1.44 billion TL in 2024. This was driven by a near-doubling of factoring revenues to 10.47 billion TL. The company’s total assets grew dramatically from 13.3 billion TL to 33.5 billion TL, fueled by a corresponding increase in loans taken to fund the expansion of its factoring receivables portfolio. This rapid growth, however, was accompanied by a more than threefold increase in provision expenses for expected credit losses, highlighting the heightened credit risk inherent in the expanded portfolio.

Independent Auditor’s Report Analysis (EY)

The independent auditor’s report, issued on January 30, 2026, provides crucial context for interpreting the financial statements.

Audit Opinion

• Conclusion: The auditor issued an unqualified opinion, concluding that the financial statements for Garanti Faktoring A.Ş. (“the Company”) as of December 31, 2025, fairly present its financial position, performance, and cash flows.
• Compliance: The statements were found to be in accordance with the “BRSA Accounting and Financial Reporting Legislation,” which incorporates Turkish Financial Reporting Standards (TFRS).

Key Audit Matter (KAM): Impairment of Financial Assets

The auditor identified the “impairment of financial assets and related important disclosures” as the single most significant area of the audit.

• Rationale for KAM Designation:
  • Materiality: Factoring receivables constitute 96% of the Company’s total assets as of December 31, 2025.
  • Complexity: The calculation of Expected Credit Losses (ECL) under TFRS 9 is complex and involves significant management judgment, estimates, and assumptions.
  • Risk: There is a risk that the policies and models created by management for ECL calculations may not be fully compliant with regulatory requirements.
• Auditor’s Response: The audit team conducted extensive procedures to address this risk, including:
  • Evaluating the reasonableness and appropriateness of management’s key judgments, methods, and data sources against standard requirements and industry practices.
  • Assessing the core assumptions within the ECL model, such as the definition of default, probability of default (PD), loss given default (LGD), and the use of macroeconomic variables.
  • Testing the accuracy and completeness of the data sets used in the calculations.
  • Performing detailed sample testing to verify the mathematical accuracy of the ECL calculations.
  • Evaluating the adequacy of the accounting policies and disclosures in the financial statements.

Other Regulatory Findings

The audit report also confirmed the following based on requirements of the Turkish Commercial Code (TTK):

• A separate report on the Early Risk Detection System and Committee was submitted to the Company’s Board of Directors on January 30, 2026.
• No significant issues were identified concerning the Company’s bookkeeping practices or compliance with financial reporting provisions in the law and its articles of association.

Financial Performance Analysis (FY 2025 vs. FY 2024)

Garanti Faktoring A.Ş. posted a robust improvement in profitability, driven by strong top-line growth that outpaced increases in financing costs and credit loss provisions.

• Revenue Growth: The 86.1% increase in factoring revenues reflects a major expansion of the Company’s business activities.
• Expense Growth: The growth was capital-intensive, as shown by the 107.4% rise in financing expenses, which were necessary to fund the larger receivables portfolio.
• Credit Risk: The most notable change is the 265.3% surge in Provision Expenses for Expected Credit Losses. While the net profit remains strong, this sharp increase indicates a significant rise in the perceived credit risk within the growing portfolio.

Financial Position Analysis (As of Dec 31, 2025 vs. Dec 31, 2024)

The Company’s balance sheet more than doubled in size in 2025, driven almost entirely by the expansion of its core factoring business funded by increased borrowing.

• Asset Growth: The 152.1% growth in total assets was overwhelmingly driven by the 148.3% expansion of net factoring receivables.
• Funding Structure: This growth was primarily financed through a 183.7% increase in loans taken.
• Equity Growth: The 67.2% increase in total equity was entirely organic, stemming from the retention of the period’s net profit. The Company’s paid-in capital remained unchanged.

Key Accounting Policies and Corporate Disclosures

Regulatory and Reporting Framework

• Governing Body: The Company operates under the supervision of the Banking Regulation and Supervision Agency (BDDK).
• Inflation Accounting (TMS 29): The financial statements for 2025 were prepared without applying inflation adjustments. A decision by the BDDK deferred the mandatory application of TMS 29 for financial institutions, including factoring companies, for the 2025 fiscal year.

Credit Risk and Impairment

• ECL Model: The Company uses a three-stage model to calculate expected credit losses as required by TFRS 9:
  • Stage 1: 12-month ECL for assets with no significant increase in credit risk.
  • Stage 2: Lifetime ECL for assets where credit risk has increased significantly since origination.
  • Stage 3: Lifetime ECL for credit-impaired assets (e.g., more than 90 days past due).
• Write-Off Policy: In 2025, the Company implemented its policy to write off non-performing receivables for which there is no reasonable expectation of recovery. A total of 62,802 Bin TL was written off during the year. This action reduced the NPL (takibe dönüşüm) ratio from a pre-write-off level of 1.50% to 1.31%. No such write-offs occurred in 2024.

Corporate Information

• Company: Garanti Faktoring A.Ş., established in 1990 and listed on Borsa İstanbul (BİAŞ) since 1993.
• Operations: The Company operates through 11 branches in Turkey.
• Employee Count: Increased from 120 in 2024 to 122 as of December 31, 2025.
• Ownership Structure: The Company is majority-owned and controlled by Türkiye Garanti Bankası A.Ş., which holds an 81.84% stake. Other significant shareholders include Türkiye İhracat Kredi Bankası A.Ş. (9.78%), with the remaining 8.38% publicly floated.