9M 2007 Earnings Release
During the first nine months of 2007, Yapı Kredi reports bank-only net income of YTL 632 mln and ROE of 25%, as a result of another quarter of consistent post-merger growth and profitability improvement
On 14 November 2007, Yapı Kredi Bank (YKB) announced its nine month 2007 results based on Turkish accounting standards (BRSA bank-only), reporting YTL 632 mln of net income (9% QoQ) and ROE of 25%.
9M07 results, following post merger impacts, confirm trend of consistent growth and profitability improvement. The Bank reported a healthy revenue growth of 18% YoY(1), supported by fee and commission growth (15% QoQ). CAR further improved to 12.9%.
Performance in the third quarter was marked by continuing positive growth trend in almost all segments of loans (mainly SME & consumer) and deposits evidenced by further market share gains especially in general purpose loans (+26% QoQ). As a result of increase in commercial focus, YKB achieved a heavier weight of loans in total assets (53%, +7 ppts vs YE06) and a reduced weight of securities (27%, -7 ppts vs YE06). Share of retail in total cash loans increased to 50% (+2ppts vs YE06) mainly driven by increased focus on consumer and SME. YKB’s dedicated approach to SMEs resulted in an increased weight of SME’s in total cash loans up to 12% (+2 ppts vs YE06).
Leadership in credit cards was maintained with outstanding volume market share up to 25.3% (+0.1 ppt QoQ). YKB completed a project for the reconstruction of Turkey’s largest credit card platform, WORLD, on 5 November. Furthermore, the Bank announced on 7 November credit card brand sharing agreement with Vakıfbank, the largest partnership in terms of number of credit cards and issuing volume signed in the Turkish credit card market so far.
In line with the accelerated branch opening plan, 23 new branch openings were realized in 3Q07 totalling 53 YTD, (total no of branches: 661). 721 additional recruitments were carried out YTD in 2007 to support the plan. Reorganization within the network also continued in paralel to its expansion.
Cost/income was reduced to 61%(1) (-5 ppts YoY) (51% if cost base adjusted for IFRS). NPL ratio declined to 6.6% (-0.2 ppts vs 2Q), with 82.4% NPL provisioning coverage.
YKB secured a one-year USD 800 mln syndicated loan on 24 September with an all-in cost of Libor + 47.5 bps (down from 52.5 bps last year) through the participation of 31 international banks. 1st phase of KFS restructuring was completed on 26 October with the transfer of YK Leasing, YK Factoring and YK Azerbaijan shares from KFS to YKB. KFS ownership in YKB increased to 81.8% (+1.6%). Subject to BRSA and CMB approvals, completion of KFS restructuring is targeted by end of December 2007.
(1) In comparison with 9M06 YKB pro-forma merged bank figures normalized for the financial cost of stake increase and sub-loan as well as some minor accounting policy applications. 2007 figures adjusted to exclude loan write-off effects mainly due to Superonline stake sale in 2Q07 and non-core fixed asset sale gain/loss in 3Q07.
İstanbul, 14 November 2007.
Enquiries:
Yapı Kredi Investor Relations
Tel: (90) (212) 339 7647
Email: yapikredi_investorrelations@yapikredi.com.tr
Yapı Kredi / 14 Nov 2007