1H08 Earnings Release
Yapı Kredi confirms positive profitability and growth trend in 1H08 with consolidated net income of YTL 740 mln, up 61% YoY (55% YoY on a normalised basis) and accelerated branch expansion above plan. Cost/Income down at 51%
On 7 August 2008, Yapı Kredi Bank (YKB) announced its consolidated first half results for 2008 based on Turkish accounting standards (BRSA), reporting YTL 740 mln of consolidated net income, up 61% YoY (55% YoY on a normalised basis) and ROE of 32.2% (31.1% on a normalised basis), confirming positive results on the basis of improved commercial focus coupled with strong cost control. Accelerated branch opening has been progressing above plan with 153 openings since launch of plan in mid-2007.
YKB Group posted YTL 2,453 mln of revenues with a healthy growth of 30% YoY (19% YoY on a normalised basis), driven by Consumer, SME and Commercial banking loan growth as well as a robust fee performance (37% YoY) despite slowdown in the market. Above market growth in consumer (83% YoY, 33% YTD) and SME lending (72% YoY, 24% YTD) resulted in further market share gains for YKB.
YKB maintained its leadership position in credit cards in terms of total outstanding volume (23.0% market share), total issuing volume (22.1% market share) and number of credit cards (18.0% market share), preserving sound profitability despite margin compression. As a result of the implementation of YKB’s brand sharing agreements with Fortis and Vakıfbank, the total number of credit cards on Worldcard platform has exceeded 10 million.
Due to continued growth momentum in core banking activities, balance sheet mix further improved with Loans/Assets ratio increasing to 53% (51% at YE07) while share of securities in assets decreased to 22% (26% at YE07). Total loans were up 19% YTD (43% YoY) reaching YTL 34.1 bln while total deposits were up 17% YTD (23% YoY) reaching YTL 39.5 bln, with weight of demand deposits over total at 17%. Loans/Deposits ratio was at a comfortable level of 86% (85% at YE07). Non-performing loan (NPL) ratio was down to 3.9% at June 2008 from 5.4% at YE2007 (stable vs 1Q08), also benefiting from portfolio disposal in 1Q08, with specific provisioning coverage at 74%.
Accelerated branch expansion was well on track and ahead of plan with 64 new openings in 2Q08 (153 since launch of plan in July 07). As of June 2008, YKB has the 3rd largest branch network in Turkey (up from # 4 position in March) with 791 branches and 9.7% market share. Despite ongoing branch expansion, Cost/Income was at 51% (down from 57% in 1H07), confirming strong focus on cost management and sustainable growth.
YKB successfully completed 920 mln YTL of rights issue on 1 August 2008. The capital increase was aimed at further supporting Yapı Kredi’s long term growth plan and leadership ambitions as well as strengthening its capital base and providing additional cushion in light of regulatory changes and financial volatility. YKB’s capital adequacy ratio (CAR) was at 13.17% at Group level and at 14.96% at Bank level as of end of June.
İstanbul, 7 August 2008
Throughout the text, normalizations refer to exclusion of the one-off effects of pension fund provisions on costs, general provision release on revenues and tax settlement expense on tax provisions in 1Q08. One-off effect of tax provision in 2Q08 also excluded.
Enquiries:
Yapı Kredi Investor Relations
Tel: (90) (212) 339 7647
Email: yapikredi_investorrelations@yapikredi.com.tr
Yapı Kredi / 07 Aug 2008