9M10 Earnings Release
Yapı Kredi confirms increasing profitability in 9M10, reporting TL 1,870 mln net income (+46% y/y) and 29.8% ROAE, driven by above sector volume growth and strong operational performance at all levels counterbalancing margin compression
On 10 November 2010, Yapı Kredi announced its consolidated 9M10 results based on Turkish accounting standards (BRSA), reporting TL 1,870 mln of cumulative net income (+46% y/y) and 699 mln TL of quarterly net income (+15% q/q). Increasing profitability was driven by strong operational performance at all levels: above sector volume growth, solid fee income, tight cost control and asset quality improvement. Return on Average Equity (ROAE) was recorded as 29.8%.
The Bank posted TL 4,846 mln revenues driven by solid fee growth (13% y/y), strong collections and one-off general provision release despite continuation of net interest margin pressure. Cost growth was recorded at 8% y/y, in line with inflation, on the back of controlled cost and headcount management despite continued branch expansion. Cost/income ratio was recorded as 40.3%.
For the first 9 months of 2010, Yapı Kredi recorded above sector loan growth of 23% focused on local currency lending (25%), also driven by increased commercial effectiveness. Local currency lending was driven by SME loans (31%) and consumer loans (28%). In credit cards, Yapı Kredi maintained its leading position in the sector (19.8% outstanding volume market share). In terms of foreign currency lending, Yapı Kredi recorded 22% growth in USD terms through focus on higher yielding project finance lending.
For the first 9 months of 2010, Yapı Kredi recorded above sector deposit growth of 14% driven by local currency deposits (16%), in line with loan growth. The Bank also maintained its large demand deposit base with weight of demand deposits in total at 18% (vs 14% sector). Yapı Kredi recorded 9% increase in assets under management and maintained its #2 position in the sector with 18.7% market share.
Yapı Kredi maintains solid liquidity position as a result of stable loan/deposit ratio (97%) despite above market volume growth together with strengthened and diversified funding base. In September 2010, Yapı Kredi successfully secured a dual-tranche multi-currency syndicated loan facility amounting to USD 1,250 million, indicating a rollover ratio of 125%. In October 2010, the Bank also secured through international debt capital markets a loan participation note of USD 750 million with a maturity of 5 years. The Bank has a comfortable capital position with capital adequacy ratio of 16.9% at Bank level and 16.0% at Group level.
As of September 2010, the positive trend in asset quality continued. Yapı Kredi’s NPL ratio was recorded as 4.3% (vs 6.3% at YE09) and specific provisioning coverage was at 72% (vs 84% at YE09).
As a result of focused efforts on increasing commercial effectiveness through innovation, client penetration, activation and acquisition as well as systems enhancements, Yapı Kredi recorded strong improvement in key productivity indicators. Loans per employee increased 27% y/y and deposits per employee increased 16% y/y.
The Bank continued its branch expansion plan with 28 new openings in the first nine months of 2010. As of September 2010, Yapı Kredi has the fourth largest branch network in Turkey with 862 branches and 9.2% market share.
Istanbul, 10 November 2010
Enquiries:
Yapı Kredi Investor Relations
Tel: (90) (212) 339 7647
Email: yapikredi_investorrelations@yapikredi.com.tr
Yapı Kredi / 10 Nov 2010