1Q19 IR Release
02 May 2019
On 2 May 2019, Yapı Kredi announced its consolidated results for the first three months of 2019 based on Turkish accounting standards (Banking Regulation and Supervision Agency). The Bank’s cash and non-cash loans reached TL 322.4 billion while total deposits rose to TL 219.7 billion. The Bank’s net income reached TL 1,241 million indicating a return on average tangible equity of 13.3%.
Local currency driven loan growth with a solid liquidity
In the first quarter, The Bank achieved 4% year-to-date growth in loans to TL 230.5 billion, mainly driven by TL loans along with CGF support which was above the private banks’ growth of 3% in the same period. During the same period, the Bank’s customer deposit growth was above the loan growth at 8% year-to-date and reached TL 215.4 billion. Deposit growth was mainly driven by FX denominated customer deposits. Also, the Bank increased its individual TL deposit market share by 47 bps to 14.2% and TL demand deposit market share by 89 bps to 15.0% within the scope of focusing on small tickets in deposit gathering. Accordingly, loan-to-deposits plus TL bonds ratio improved by 1 pp to 103%. Following the volatile period during the second half of 2018, Yapı Kredi continued to maintain its well-positioned liquidity levels. Accordingly, the Bank’s total and FC liquidity coverage ratios realised at 152% and 382%, respectively.
Prudent and conservative asset quality approach
In the first quarter of 2019, Yapı Kredi maintained its precautious approach in terms of asset quality. During this period, Yapı Kredi sold a non-performing loan portfolio of TL 396 million in principal amount (-14 bps NPL ratio impact) within the scope of continued active stock management. Hence, the NPL ratio materialized at 5.4%. Accordingly, cost of risk (adjusted for hedged FX impact) improved by 37 bps to 219 basis points year-to-date. With the ongoing conservative provisioning approach of Yapı Kredi, provisions to gross loans further increased to 6.0%.
Strong capital ratios through AT-1 issuance and ongoing internal capital generation
In the first quarter of 2019, despite the negative impact coming from the market volatility and one time impact at the operational risk, the capital ratios of the Bank supported through AT-1 issuance and ongoing internal capital generation. Hence, consolidated Capital Adequacy Ratio, Tier-1 ratio and Common Equity Tier-1 ratio realised at 15.0%, 12.1%and 11.0%, respectively.
Solid top-line within conservative asset quality approach and strong liquidity
In the first quarter of 2019, Yapı Kredi increased its core banking revenues by 24% year-over-year driven by double digit growth in both fees and net interest income. On the other hand, the past through impact of the high inflation level of 2018 was kept under control by continued discipline in cost management, resulting in a cost growth of 18% below inflation of 19.7%. Cost-to-income ratio (income adjusted for trading income to hedge FC ECL and collections, cost adjusted for pension fund provision) increased by 69 basis points year-over-year to 34.9%. Despite the improvement in core spreads, NIM contracted due to the significant decline in contribution of the CPI linked securities, as the Bank uses October to October inflation of 12% for the valuation of its CPI linked securities (2018 realization: 25.2%). All in all, the Bank achieved a net income of TL 1,241 million and 13.3% return on average tangible equity.
Istanbul, 2 May 2019
Enquiries: Yapı Kredi Investor Relations
Tel: (90) (212) 339 6770
Email: yapikredi_investorrelations@yapikredi.com.tr
Yapı Kredi / 02 May 2019