9A21 Financial Results IR Release
On 1 November 2021, Yapı Kredi announced its consolidated results for the first nine months of 2021 based on Turkish accounting standards (Banking Regulation and Supervision Agency). The Bank’s cash and non-cash loans reached TL 464.7 billion while total deposits reached to TL 324.8 billion. The Bank’s net income reached TL 6,932 million indicating a return on average tangible equity of 18.6%.
Local currency driven loan and deposit growth with a solid liquidity
In the first nine months of the year, The Bank achieved 19.4% year-to-date growth in performing loans to TL 336.6 billion, mainly driven by Turkish Lira. During the same period, the Bank’s total customer deposit growth was at 22.5% year-to-date and reached TL 317.8 billion. Also, the share of demand deposits in total improved 175 basis points year-to-date to 38% within the scope of continued focus on small tickets in deposit gathering. Accordingly, loan-to-deposits plus Turkish Lira bonds ratio reached to 101%. The Bank’s total and foreign currency liquidity coverage ratios realized at 147% and 560%, respectively.
Prudent and conservative asset quality approach
In the first nine months of 2021, Yapı Kredi’s non-performing loan ratio improved to 4.9% (Comparable: 5.3%). Compared to 2020, non-performing loan inflows declined with strength in collections, resulting in improvement in cost of risk. Accordingly, cumulative cost of risk (adjusted for hedged foreign currency impact) materialised at 51 basis points in the first nine months of 2021. Provisions to gross loans realized at 6.9%.
Strong capital ratios and ongoing internal capital generation
In the first nine months of 2021, despite the negative impact coming from the market and currency volatility the capital ratios of the Bank were supported by ongoing internal capital generation through profitability and optimization efforts and by the contribution from the IRB adoption. Hence, consolidated Capital Adequacy Ratio, Tier-1 ratio and Common Equity Tier-1 ratio realised at 16.0%, 13.7% and 12.3%, respectively, excluding regulatory forbearances.
Solid top-line improving asset quality and strong liquidity
In the first nine months of the year, Yapı Kredi recorded TL 16,694 million of core banking revenues. Thanks to the ongoing repricing, strong demand deposit performance supporting cost of funding, net interest margin excluding linkers widened 10 basis points on a quarterly basis. With the support from CPI linker securities, swap adjusted net interest margin improved 82 basis points to 3.6%, in the third quarter of the year. Yapı Kredi witnessed a substantial 34.2% improvement in year-over-year fee growth across the board thanks to ongoing diversification efforts, reaching to TL 5,703 million. Operating costs increased by 17% year over year -below average inflation- to TL 7,222 million. All in all, the Bank achieved a net income of TL 6,932 million and 18.6% return on average tangible equity.