1H09 Earnings Release
In the first half of 2009, Yapı Kredi reported TL 930 mln of net income in its BRSA consolidated financials, confirming solid profitability performance driven by robust revenue growth and strong cost control. Increase in specific coverage ratio to 69% (+10 pps vs 1Q09). CAR up to 15.7% at Group level
On 4 August 2009, Yapı Kredi announced its consolidated first half results for 2009 based on Turkish accounting standards (BRSA), reporting TL 930 mln of net income, up 26% y/y. The Bank recorded Return on Average Equity (ROAE) of 27.2% driven by positive revenue performance accompanied by strong cost control.
The Bank posted TL 3,199 mln of revenues, up 30% y/y, driven by 37% y/y growth in net interest income and 14% y/y growth in fees and commissions. Tight cost containment measures resulted in a 3% y/y decline in costs despite the impact of branches opened in 2008. Cost/Income declined to 38% (vs 51% in 1H08).
In 1H09, the Bank continued to support its customer base and focus on customer related core banking business. Driven by sluggish business activity and macroeconomic slowdown, Yapı Kredi’s loan book contracted 2% year-to-date to 38.2 bln TL. In 2Q09, there was a slow pick-up in loan volumes driven by TL retail loans and Yapı Kredi recorded a 1% q/q growth in TL loans mainly driven by 6% q/q growth in mortgages. As a result of above sector growth in consumer loans (4% ytd), share of consumer loans in total loans increased to 25% (vs 24% at YE08). On the back of lower liquidity pressure, release of costly deposits and customers’ shift to assets under management, deposit volumes declined (-5% ytd) to 41.9 bln TL.
Parallel to sector trends, asset quality deterioration continued in 2Q09, albeit at a slower pace. NPL ratio increased to 5.7% (vs 5.3% in 1Q09) partially compensated by proactive credit risk management efforts leading to significant increase in collections (restructuring programs, NPL portfolio sale and credit infrastructure improvements). Specific provisioning coverage was increased to 69% (+10 pps vs 1Q09).
In 1H09, YKB’s capital, liquidity and funding position remained strong. In April, Yapı Kredi successfully secured a new syndication of ~USD 410 mln for an all-in cost of Libor+2.50% per annum. The Bank maintained a comfortable funding position with a loans/deposits ratio of 91% (vs 88% at YE08) on a consolidated basis. YKB’s capital adequacy ratio improved to 17.1% at bank-only level and at 15.7% at consolidated level.
As of 1H09, Yapı Kredi has the fourth largest branch network in Turkey with 844 branches and 9.5% market share. Yapı Kredi’s branch expansion plan, which is on a temporary stand-by, is expected to be resumed in the final quarter of the year once macroeconomic conditions normalise.
Yapı Kredi’s credit card brand “World” became the seventh largest credit card platform in Europe according to the 2009 Nilson Report. In April, at the 2009 Visa Europe member awards, “World” was awarded the “Best New Customer Proposition” and the “Best of the Best” awards for its innovative “Play Club” card aimed at young adults.
In light of strong focus on alternative delivery channels, Yapı Kredi’s achievements were recognised in 1H09 at the Global Finance “World’s Best Internet Banks” awards where the Bank received three awards including “Best Corporate/Institutional Internet Banks in Turkey”.
Yapı Kredi / 04 Aug 2009