2000 year-end IAS 29 Financial Statements
According to consolidated inflation adjusted financial statements, the total assets of Yapi ve Kredi Bankasi A.S. (Yapi Kredi) increased by 11.2% in 2000 and reached TL 8,842 trillions (US$ 13,163 millions). Yapi Kredi's net income for 2000 was 123 trillions (US$ 184 millions) down from 162 trillions (US$ 241 millions) in 1999. However, net income before extraordinary items (earthquake taxes), minority interest and loss on net monetary position was TL 278 trillion (US$ 413 millions) for 2000, slightly above 1999. This was achieved despite falling interest margins and the adverse consequences of year-end turbulence in Turkish financial markets.
Income Statement Due to decreasing interest rates on loans and marketable securities in 2000, the interest income was TL 1,361 trillions (US$ 2,025 millions), down by 23.6% from TL 1,782 trillions (US$ 2,652 millions) in 1999. As a result of increased economic activity in the first 10 months of 2000, the contribution of interest and fees on loans to total interest income increased to 64.6% from 60.6% in 1999. The contribution of interest on marketable securities to total interest income decreased from 30.5% to 28.6%.
Total interest expense was 641 trillions (US$ 954 millions) for 2000, down by 38.9% compared to 1999. Due to the significant fall in interest rates on time deposits and the increase in volume of demand deposits, interest expense on deposits was TL 435 trillions (US$ 647 millions), a decrease of more than 50%. As a result of higher level of international borrowing during 2000, the interest on funds borrowed from banks and notes issued increased by 32.3% to reach TL 206 trillions (US$ 307 millions).
Due to higher provisioning for doubtful loans, provision for loan losses and doubtful receivables increased by 58.3% and was TL 88 trillions (US$ 132 millions).
With the effect of the crawling peg regime during 2000, foreign exchange losses were down to TL 132 trillions (US$ 197 millions) from TL 226 trillions in 1999 (US$ 336 millions).
As a result of these factors, net interest income after provision for loan losses and doubtful receivables and foreign exchange loss increased by 10.6% to reach TL 499 trillions (US$ 743 millions).
Total non-interest income for 2000 was TL 677 trillions (US$ 1,008 millions). Due to lower volatility in the interest rates on marketable securities during 2000, income from capital market operations fell from TL 162 trillions (US $ 242 millions) in 1999 to TL 31 trillions (US$ 47 millions). Yapi Kredi's income from banking services was 176 trillions in 2000 (US$ 262 millions) up by 13.1% when compared to 155 trillions (US$ 231 millions) in 1999. In line with the strategic decisions taken previously, Yapi Kredi sold the remaining 50% of its shares in Superonline in exchange of 20% of Fintur, resulting in gross income of TL46 trillions (US$ 68 millions). Further, Yapi Kredi participated in the IPO of Turkcell by selling 1% of its shares and realized an investment sales income of TL 107 trillions ( US$ 159 millions).
As a result of some precautionary actions, personnel expenses were TL 165 trillions (US$ 246 millions) down by 11.3% when compared to TL 186 trillions (US $ 277 millions) in 1999. General and administrative expenses increased to TL 195 trillions (US$ 290 millions) mainly due to heavy advertising and promotion campaigns related with increased competition in consumer banking.
In 2000, the Bank paid TL 76 trillions (US$ 113 millions) of extraordinary tax, which was levied as withholding tax on government bonds to meet the cost of earthquake reconstruction.
Balance Sheet In 2000, Yapi Kredi increased its balance sheet by 11.2% to reach total consolidated assets of 8,842 trillions (US$ 13,163 millions).
Yapi Kredi continued to be one of the major lenders in the sector. The loan book grew by 17.3% to TL 3,283 trillions (US$ 4,886 millions) in 2000 and made up 37.1% of total assets compared to 35.2% in 1999. With the revival of economic activity especially in the second and third quarters of 2000, the consumer loans, including the credit card receivables, grew by more than 70% to make up 27% of the total portfolio. Due to the adverse economic conditions especially after the November crisis, the doubtful loans to total loans ratio was 6.1% at year-end 2000. Marketable securities stayed relatively flat in 2000 and amounted to TL 2,273 trillions (US$ 3,384 millions) at the end of 2000 to make up 25.7% of total assets. Yapi Kredi used its increased liquidity in short-term placements during 2000 which reached TL 748 trillions (US$ 1,113 millions) at the end of 2000.
Deposits, which have up 62.6% of total funding at the end of 2000, grew by 5% and reached 4,464 trillions (US$ 6,646 millions). During 2000, the Turkish Lira customer demand deposit base grew by 40% y-o-y to reach TL 337 trillions (US$ 502 millions). Foreign currency deposits made up 72% of total customer deposits at year-end 2000 in comparison to 77% at year-end 1999. Yapi Kredi's credibility in the international financial markets was reflected in two renewed syndicated one-year trade finance facilities which amount to $750 million in total. The consolidated equity reached to $2.5 billion and the capital adequacy was 33%, one of the highest figures in the industry.
Yapı Kredi / 08 May 2001