Beyond the Balance Sheet: 5 Surprising Truths from QNB’s 2025 Financial Audit

The 56 Billion Lira Story

By the close of business on December 31, 2025, QNB Finansal Kiralama A.Ş. had etched a figure into the ledgers that demands the attention of any serious market observer: 56.4 billion. While financial audits are frequently dismissed as dry compliance rituals, the latest report issued by Güney Bağımsız Denetim (a member firm of Ernst & Young Global Limited) serves as a high-definition snapshot of a Turkish industrial sector in the midst of an aggressive investment super-cycle. Under the signature of Lead Auditor Hayrettin Ergül, the audit reveals a company that managed to nearly double its asset footprint in a single year. But in an era of shifting regulations and inflationary headwinds, how does a firm achieve such a massive leap while maintaining the “clean” audit opinion that global investors crave?

The Great Expansion: A 25 Billion Lira Jump in 12 Months

Beneath the surface of the consolidated balance sheet lies a story of aggressive scaling. QNB Finansal Kiralama’s total assets surged from 31.2 billion TL at the end of 2024 to a staggering 56.4 billion TL by the end of 2025—an 80% expansion in just twelve months.

More impressive than the raw growth is the liquidity architecture supporting it. The firm didn’t just grow; it fortified its cash position, moving from 899 million TL to 4.2 billion TL in “Cash and Cash Equivalents.” This five-fold increase suggests a deliberate strategy to maintain a high-velocity liquidity buffer amidst a volatile macroeconomic backdrop. The accuracy of this rapid scaling was a primary focus for the auditors, who noted:

“In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and its financial performance and its cash flows for the period then ended in accordance with BDDK Accounting and Financial Reporting Legislation.”

Financial Triaging: The Complexity of Expected Credit Losses

In the world of modern accounting, TFRS 9 is the “crystal ball” of the balance sheet. Auditors identified the management of “Expected Credit Losses” as the audit’s most significant challenge, primarily because it requires management to predict the future using complex models and subjective assumptions. For a sophisticated reader, these impairments are best understood as “Financial Triaging”—a system designed to categorize the health of the receivables portfolio before a crisis hits:

• Stage 1 (Performing): Assets with no significant increase in credit risk since inception. These require a 12-month expected loss provision.
• Stage 2 (Under-performing): Assets showing a significant increase in risk, specifically those with payment delays between 30 and 90 days or those undergoing restructuring.
• Stage 3 (Non-performing): Credit-impaired assets, typically defined by payment delays exceeding 90 days, where the probability of default is often modeled at 100%.

Maintaining a clean opinion while navigating these stages during an 80% expansion in the loan book is no small feat; it suggests a robust internal risk-rating infrastructure that kept pace with the sales team’s ambitions.

Where the Money is Flowing: The Industrial Export Pivot

Analyzing the “Sectoral Distribution of Leasing Receivables” provides a rare look at which parts of the Turkish economy are actually putting capital to work. While many focus on consumer trends, QNB’s 2025 data shows a heavy tilt toward industrial capacity:

• Construction: 15% (up from 14% in 2024)
• Manufacturing Industry: 12%
• Textiles and Textile Products: 11%

While Construction remains the leader, the combined weight of Manufacturing and Textiles (23%) indicates a significant shift toward export-oriented industrial capacity. This diversification suggests that the 25 billion TL jump in assets isn’t just a domestic real estate play, but a strategic bet on Turkey’s role as a regional manufacturing hub.

The Inflation Accounting Paradox

Perhaps the most surprising “truth” in the 2025 audit is what isn’t there. Despite Turkey’s high-inflation environment, the Banking Regulation and Supervision Agency (BDDK)—through a series of decisions including the definitive No. 11021 in December 2024—mandated that “TMS 29” (High Inflation Accounting) should not be applied to the 2025 financial statements.

This creates a paradox: QNB reported a Net Profit of 1.83 billion TL (a rise from 1.2 billion TL in 2024), but this figure is “nominal.” In a high-inflation climate, real earnings might look different, yet the firm’s massive 4.2 billion TL cash position acts as a vital safety net. It is also worth noting the firm’s significant contribution to the public purse; even with these regulatory nuances, the company provided 999 million TL for Corporate Tax in 2025. Investors should also note that as of the audit date, the Board of Directors has not yet proposed a dividend distribution for the 2025 period, prioritizing capital retention during this growth phase.

The High-Stakes Hedge: Managing 28 Billion in Derivatives

To protect this massive expansion from the twin wolves of currency and interest rate volatility, QNB Finansal Kiralama manages a derivative portfolio with a nominal value of 28.2 billion TL.

However, a closer look at Footnote 5 reveals a highly disciplined approach to risk. Only 2.6 billion TL is allocated to “trading” swaps, while a dominant 25.5 billion TL is dedicated strictly to hedging. Most notably, 16.4 billion TL of that is tied to interest rate swaps for “Cash Flow Risk Management.” This shows a company that isn’t just playing the currency markets, but is aggressively locking in its cost of funds to protect its margins. The auditors exercised a high degree of “professional skepticism” regarding these valuations, stating:

“As part of our audit… we evaluated the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by management regarding these valuations.”

Conclusion: Looking Toward 2026

QNB Finansal Kiralama’s trajectory is one of institutional maturation. Moving from a 1.2 billion TL profit to 1.83 billion TL in a single year, while nearly doubling the asset base, indicates a firm that has mastered the art of scaling in a complex regulatory environment.

The most telling indicator of what comes next lies in the equity structure. While the company’s paid-in capital stands at 2 billion TL, the capital ceiling was recently raised to 5 billion TL. This suggests 150% room for future equity expansion as the firm prepares for its next chapter. As QNB nears this ceiling, the question for 2026 remains: Is the Turkish leasing market entering a new era of institutional stability, or are the risks of a complex global economy still lurking beneath the surface of these pristine figures?

Briefing Document: QNB Finansal Kiralama A.Ş. 2025 Annual Financial Audit

Executive Summary

This briefing document provides a comprehensive synthesis of the financial position, operational performance, and audit results for QNB Finansal Kiralama Anonim Şirketi (the “Company”) for the fiscal year ending December 31, 2025. Based on the independent audit conducted by Güney Bağımsız Denetim ve SMMM A.Ş. (a member firm of Ernst & Young Global Limited), the Company’s financial statements present a fair and accurate view of its financial standing in accordance with Banking Regulation and Supervision Agency (BDDK) accounting and financial reporting legislation.

Critical Takeaways:

• Audit Opinion: The Company received an unqualified (clean) opinion for the 2025 fiscal year.
• Financial Growth: Total assets increased significantly from 31.2 billion TL in 2024 to 56.4 billion TL in 2025.
• Profitability: The Company reported a net profit for the period of 1.83 billion TL, compared to 1.21 billion TL in the previous year.
• Key Audit Matter: The primary focus of the audit remained the calculation of “Expected Credit Loss” (ECL) provisions for leasing receivables under TFRS 9, due to the complexity and high level of management judgment involved.
• Macroeconomic Context: Despite high inflation, the Company did not apply inflation accounting for the 2025 period, following specific regulatory decisions by the BDDK.

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1. Audit and Compliance Framework

1.1 Independent Audit Overview

• Auditor: Güney Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. (Ernst & Young).
• Responsible Auditor: Hayrettin Ergül.
• Reporting Date: January 30, 2026.
• Standards: The audit was conducted in accordance with Independent Auditing Standards (BDS) issued by the Public Oversight, Accounting and Auditing Standards Authority (KGK).
• Prior Year: The 2024 financial statements were audited by a different firm, which also provided an unqualified opinion on January 29, 2025.

1.2 Regulatory Compliance

The financial statements were prepared based on the “BDDK Accounting and Financial Reporting Legislation,” which includes:

• Regulation on Accounting Applications and Financial Statements of Financial Leasing, Factoring, Financing, and Savings Financing Companies.
• BDDK communiqués, circulars, and announcements.
• Turkish Financial Reporting Standards (TFRS) for matters not specifically regulated by the BDDK.

1.3 Inflation Accounting Status

Following BDDK decisions (Decision No. 11021, dated December 5, 2024), financial leasing companies were instructed not to apply inflation accounting (TMS 29) for the 2025 fiscal year. Consequently, the 2025 financial statements are presented without adjustments for high inflation.

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2. Key Audit Matter: Expected Credit Loss (ECL)

The audit identified the provision for expected credit losses on leasing receivables as the “Key Audit Matter” due to its materiality and the complexity of the TFRS 9 model.

2.1 Rationale for Key Audit Matter

• Leasing receivables constitute a major portion of the balance sheet.
• ECL calculations involve complex policies, estimates, and assumptions regarding future economic conditions.
• Judgment is required to define “significant increase in credit risk,” “definition of default,” and “macroeconomic variables.”

2.2 Audit Procedures Performed

• Evaluation of the Company’s accounting policies for compliance with TFRS 9.
• Testing the accuracy and completeness of the data sets used in ECL calculations.
• Assessment of management’s key judgments and estimates by financial risk management experts.
• Mathematical verification of the ECL calculation through sample testing.

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3. Financial Performance and Position

3.1 Balance Sheet Highlights

3.2 Income Statement Highlights

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4. Operational Structure and Risk Profile

4.1 Company Identity

• Establishment: March 20, 1990.
• Name Change: Formerly “QNB Finans Finansal Kiralama Anonim Şirketi,” the name was changed to “QNB Finansal Kiralama Anonim Şirketi” on October 25, 2024.
• Ownership: The main shareholder is QNB Bank A.Ş.; the ultimate parent is Qatar National Bank (QNB).
• Personnel: 131 employees as of December 31, 2025.
• Branches: 13 branches (reduced from 14 in 2024).

4.2 Credit Risk Exposure by Sector

The Company’s leasing portfolio is diversified across various industries. The largest sectors by exposure include:

• Construction: 15% (6.99 billion TL)
• Manufacturing Industry: 12% (5.39 billion TL)
• Textile and Textile Products: 11% (4.97 billion TL)
• Services: 9% (4.23 billion TL)
• Chemicals: 8% (3.46 billion TL)

4.3 Asset Quality (TFRS 9 Stages)

The Company classifies its leasing receivables into three stages based on credit risk:

• Stage 1 (Standard): 44.44 billion TL (Provision: 84.1 million TL).
• Stage 2 (Significant Increase in Risk): 1.43 billion TL (Provision: 371.8 million TL).
• Stage 3 (Default/Non-performing): 825.5 million TL (Provision: 481.7 million TL).
• Write-offs: During 2025, 229.3 million TL in receivables were written off, and a portion was sold to an asset management company for 20 million TL.

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5. Significant Accounting Policies and Estimates

5.1 Taxation

• Corporate Tax Rate: Applied at 30% for the 2025 fiscal year.
• Deferred Tax: The Company recognized a net deferred tax asset of 305.8 million TL, primarily driven by provisions for leasing receivables and derivative financial instruments.

5.2 Derivatives and Risk Management

The Company utilizes derivative financial instruments (primarily currency and interest rate swaps) to manage risks related to exchange rates and interest rates.

• Nominal Amount of Derivatives: 28.2 billion TL (up from 18.7 billion TL in 2024).
• Hedge Accounting: Applied for both Fair Value Hedges and Cash Flow Hedges related to issued securities and loans.

5.3 Dividend Distribution

For the 2025 period, the Board of Directors had not yet prepared a dividend distribution proposal at the time of the audit report. However, the distributable net period profit was calculated at 1.83 billion TL. Notably, the BDDK has mútalaad that deferred tax income cannot be used for cash dividend distribution or capital increases.