1Q 2008 Earnings Release
For the first three months of 2008, Yapı Kredi reports consolidated net income of YTL 447 mln, up 108% YoY (76% YoY on a normalised basis) confirming positive results of regained commercial focus and accelerated branch expansion plan
On 15 May 2008, Yapı Kredi Bank (YKB) announced its consolidated first quarter results for 2008 based on Turkish accounting standards (BRSA), reporting YTL 447 mln of consolidated net income, up 108% YoY (+76% YoY on a normalised basis) and ROE of 38.6%, (32.5% on a normalised basis), confirming positive results of regained commercial focus and accelerated branch expansion plan.
YKB Group posted YTL 1,295 mln of revenues with a healthy growth of 42% YoY (23% YoY on a normalised basis), driven by strong retail banking volumes especially in consumer and SME loans as well as a robust fee growth (+37% YoY at Group level, +40% YoY at Bank level). In 1Q08, on the back of healthy sector activity, YKB grew significantly above the market in both consumer (especially 31% in general purpose loans and 15% in mortgages) and SME loans, further increasing its market shares.
Due to continued growth momentum in core banking activities, balance sheet mix further improved with Loans/Assets ratio increasing to 52% while securities mix in assets decreased to 24%. Total loans were up 11% YTD (44% YoY) reaching YTL 31.9 bln while total deposits were up 7% YTD (23% YoY) reaching YTL 36.2 bln, with heavier weight of demand deposits over total at 17%. Loans/Deposits ratio was at a comfortable level of 88% (+3 pp vs. YE07).
Despite ongoing branch expansion, Cost/Income was at 49% benefiting from the positive gap between revenue and cost growth. Accelerated branch expansion plan was on track with 51 new openings in 1Q08 (110 since launch of plan in July 07). As of March 2008, YKB had a total of 725 branches with a coverage of 68 cities and 9.2% market share (61% of branch network concentrated in top 4 cities).
NPL ratio declined to 3.9%, also driven by NPL sale and collections, with 75% provisioning coverage (5.4% on a like-for-like basis), confirming focus on asset quality.
As of end of March 2008, YKB’s capital adequacy ratio (CAR) was at 12.7% at consolidated level and 14.6% at bank level. Following the resolution of its Board of Directors on May 15, YKB launched the process of capital increase (in cash) of YTL 920 mln through a rights offering without any restrictions on pre-emptive rights. The capital increase has the following rationale: (1) Reinvest proceeds of KFS restructuring, (2) Support YKB’s long-term growth plan and leadership ambitions, maintaining sustainable ROE target in the range of 20%, (3) Provide YKB with additional capital cushion in light of rapidly changing regulatory environment and financial volatility, (4) Realign YKB’s Tier I ratio with key competitors. The rights offering and subscription period is planned to take place within July and the official process is expected to be completed during 3Q08, subject to regulatory approvals.
İstanbul, 15 May 2008
(*) Normalized to exclude the one-off effects of pension fund provisions on costs, general provision release on revenues and tax settlement expense on tax provisions
Enquiries:
Yapı Kredi Investor Relations
Tel: (90) (212) 339 7647
Email: yapikredi_investorrelations@yapikredi.com.tr
Yapı Kredi / 15 May 2008