9M08 Earnings Release
Yapı Kredi confirms profitability and growth trend in 9M08 with consolidated net income of YTL 1,102 mln, up 52% y/y despite deteriorating market conditions. Cost growth at 12% y/y due to rigid cost management and efficiency effort. Strong capital base following capital increase in August with CAR* at 15.4% at Bank level (13.7% at Group level).
On 12 November 2008, Yapı Kredi Bank (YKB) announced its consolidated nine month results for 2008 based on Turkish accounting standards (BRSA), reporting YTL 1,102 mln of consolidated net income, up 52% y/y (49% y/y on a normalized basis) and ROE of 32.0% (31.3% on a normalized basis) driven by positive commercial performance and rigid cost management. YKB reported quarterly consolidated net income of YTL 362 mln in 3Q08, up 23% q/q (7% on a normalized basis). Despite sustained branch openings, Cost/Income improved to 51% due to rigid cost management and strong efficiency effort.
YKB posted YTL 3,608 mln of revenues with a healthy growth of 26% y/y (19% y/y on a normalized basis), driven by 19% y/y growth in net interest income and 35% y/y growth in fees and commissions.
Growth in core banking activities led to further improvement of balance sheet mix with Loans/Assets ratio increasing to 55% (51% at YE07) while share of securities in assets decreased to 20% (26% at YE07). Total performing loans increased 27% y-t-d (44% y/y) reaching YTL 36.5 bln. Total deposits grew 20% y-t-d (24% y/y) reaching YTL 40.3 bln, with weight of demand deposits over total slightly improving to 17.0%. Loans/Deposits ratio was at a comfortable level of 91% (85% at YE07). Despite some signals of deterioration in SME segment and credit cards, non-performing loan (NPL) ratio remained stable at 3.96% vs. 2Q08 but down from 5.78% at YE07, partially benefitting from portfolio disposal, write-offs and collections.
Branch opening plan has been progressing successfully in 2008 with 159 net new openings since the beginning of the year. Yapı Kredi had 835 branches as of September 2008 (+44 new openings in 3Q08 and +197 since the launch of plan in July 07). Despite branch openings, costs increased 12% y/y, with Cost/Income at 51% (down from 57% in 9M07), driven by rigid cost management and strong efficiency efforts.
YKB entered into a more challenging market environment with regained profitability and efficiency, strong capital base and sound liquidity, allowing the Bank to continue its commercial activity with a more prudent and disciplined approach. YKB successfully completed YTL 920 mln capital increase in early August through a rights issue with 100% subscription. As of end of September, CAR* (Capital Adequacy Ratio) was 15.4% at Bank level and at 13.7% at Group level. In addition, YKB raised USD 1 bln syndication in September to replace and increase USD 800 mln 1 year facility that had matured.
İstanbul, 12 November 2008
Throughout the text, normalizations refer to exclusion of the one-off effects of pension fund provisions on costs, general provision release on revenues and tax settlement expense on tax provisions in 1Q08. 2Q08 normalized to exclude one-off tax risk provision and 2Q07 normalized to exclude the gross-up effect of Superonline write-off on revenues and provisions. (*) Does not include the full impact of YTL 920 mln capital increase which was formally approved by the Banking Regulation and Supervision Agency (BRSA) on 3 November 2008. Including the full impact, CAR would be ~16% at Bank level and ~ 14% at Group level.
Enquiries:
Yapı Kredi Investor Relations
Tel: (90) (212) 339 7647
Email: yapikredi_investorrelations@yapikredi.com.tr
Yapı Kredi / 12 Nov 2008