Message from the CEO

Dear Stakeholders,

As Yapı Kredi, we are all deeply saddened by the earthquake disaster in Turkey. Bearing in mind the importance of sustainability and our responsibility towards our country and our people, we will continue to stand by our citizens in solidarity.

Growth, inflation and central bank monetary policies as well as developments in the banking sector continued to be the main topics to be followed by the global markets in the first quarter of 2023. Following the bankruptcy of Silicon Valley Bank in the US, liquidity concerns have arisen. In light of these developments, we have started to observe central banks, especially the FED, insinuating the end of rate hike cycles. Ongoing fight with inflation and the decreasing economic activity on the back of Russia-Ukraine war continue to put pressure on growth. According to the International Monetary Fund's Global Economic Outlook report dated April 2023, global growth is expected to slow down this year to 2.8% before stabilizing around 3.0% in 2024.

Our country's economy, on the other hand, continued its growth in a controlled manner despite the challenging conditions in the global markets. The Turkish economy grew by 5.6% in 2022 compared to the previous year. It is observed that the growth has been supported by foreign demand in the first half and domestic demand in the second half of the year. Growth in 2023 is expected to be negatively affected by the earthquake disaster that happened on February 6. However, the extent and duration of the negative impact coming from the affected area, which accounts for 9.3% of Turkey’s GDP, will be a key component.

The Turkish banking sector, once again proved its resilience during this challenging period. Following the earthquake disaster, it not only did its best to heal the wounds of the earthquake survivors, but also continued its uninterrupted support to the economy by standing by its customers.

As Yapı Kredi, our support to the economy through cash and non-cash loans has increased by 42% annually exceeding TL 918 billion. In TL cash loans, the Bank recorded a year-to-date growth of 9% and an annual growth of 75%. On the other hand, year-to-date TL customer deposit growth was 26%, well above the loan growth. Thus, the Bank's TL loan deposit ratio decreased by 13 points to 91% during the first three months of the year.

While maintaining its support to the economy, the Bank preserved its strength in capital and liquidity ratios. The FX liquidity coverage ratio was 599%, while the total liquidity coverage ratio realized at 177% level. On the capital side, with the internal capital generation contributions, the consolidated capital adequacy ratio and the Tier 1 ratio remained strong at 16.5% and 14.8%, respectively (without the impact of regulatory forbearances).

I would like to take this opportunity to thank our customers, our shareholders for their trust, and our employees for their valuable efforts.


Gökhan Erün

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