First Quarter Earning Release
Yapı Kredi Bank back to profitability and within regulatory requirements with respectively net profit of YTL 56 mln and CAR of 11,7%
Today the Board of Directors of Yapı Kredi approved the interim “Publicly available unconsolidated financial statements and review report” as of March 31st, 2006 prepared according to the local accounting standards (MUY).
• Net profit of YTL 56 mln and annualised ROE of 13,3%
• Positive development of operating income (YTL 177 mln, +168% vs pro-forma 4Q051) thanks to revenues growth (total revenues of YTL 505 mln, +17% vs 4Q05) driven by:
– Net interest income of YTL 257 mln (+8,6% vs 4Q05)
– Net non interest income of YTL 248 mln (+28% vs 4Q05)
– Operating expenses of YTL 329 mln (-10% vs pro-forma 4Q051)
• Total customer performing loans up to YTL 11,759 mln (+41%2 YoY, +5,9% vs year end) driven by house loans (up to YTL 790 mln, +404% YoY and +37% vs year end) and credit cards (up to YTL 4,119 mln, +31% YoY and +4,4% vs year end)
• Confirmed the leadership position on credit cards business with 23,5% turnover market share
• Asset under management up to YTL 2,730 (+34% YoY)
• NPL ratio down to 8,2% (vs 8,5% of year end and 9,3% of September 2005)
• Equity up to YTL 1,728 mln
• Capital adequacy ratio (CAR) up to 11,7% thanks to the €500 mln subordinated loan
1 Net of 2005 adjustments 2 Net of September 2005 Cukurova loan adjustment Today the Board of Directors of Yapı Kredi approved the interim “Publicly available unconsolidated financial statements and review report” as of March 31st, 2006 prepared according to the local accounting standards (MUY).
The first quarter of 2006 ended with a net profit of YTL 56 mln and with the Bank back to profitability after the losses of 2005.
The Bank’s total revenues reached YTL 505 mln, with an increase of 10% over the same period of the previous year (YoY) and 17% over the last quarter of 2005 (QoQ). This trend was underpinned by the positive performance of both interest and non interest income.
Total net interest income reached YTL 257 mln (-8,4% YoY and +8,6% QoQ); the growth over last quarter is driven by the decrease of interest expenses (-8,2% QoQ) and the asset restructuring started with the sale of Turkcell, Digiturk and Fintur.
Customer performing loans grew by 41% YoY (if March 2005 is netted by Cukurova group loan adjustment) and 5,9% QoQ, reaching the total of YTL 11,759 mln. The increase is driven by the development in housing loans (up to YTL 790 mln, +404% YoY and +37% vs year end) and by the expansion in credit cards (up to YTL 4,119 mln, +31% YoY and +4,4% vs year end). On Credit cards the Bank confirmed its leadership with 23,5% turnover market share.
In the mean time credit quality improved with non performing loans ratio down to 8,2% (from 8,5% of year end and 9,3% of September 2005) and a general increase in the coverage ratios: specific provisions over NPL become 81% (from 80% at year end and 69% of March 2005) while general provisions over performing loans totalled at 3,4% (from 3,4% of year end and 0,8% of March 2005).
Direct deposits amounted to YTL 15,724 mln, with an increase of 8,8% YoY. In the last quarter the decrease is driven by the strategy of the Bank that decided to release the high cost deposits after the huge liquidity inflow from the completion of Turkcell, Digiturk and Fintur transactions (total of YTL 1,8 bln).
On the other side, the indirect deposits with customers (assets under management and under custody) increased by +12% YoY and +4,5% over year end (up to YTL 8,052 mln); mutual funds market share at 9,9% and customer assets under custody at 5,9%.
Net non interest income increased up to YTL 248 mln (+40% YoY, +28% QoQ) driving its share over total revenues up to 49% (from 39% of a year ago and 45% of last quarter of 2005), thanks also to the development of credit cards and mutual fund businesses.
Operating expenses, amounted to YTL 329 mln (including also YTL 27,3 mln for the pro-rata pension fund adjustment), decreased by 10% over the last quarter of 2005 (pro-forma)3, mainly thanks to the early positive results of the cost management actions in place thus bringing the cost / income at 65% (compared with 63% of the
3 Net of 2005 adjustmentsfull 2005 pro-forma). Provisions of YTL 111 mln includes mainly YTL 54 mln for specific and YTL 26 mln for general loan loss provisions
Therefore, after including YTL 36 mln of dividends from subsidiaries, profit before tax resulted as YTL 102 mln, compared with the almost break even of the last quarter of 2005 pro-forma.
The annualised return of equity (ROE) become 13,3%, and ROA 0,95%.
At the end of the first quarter of 2006 the Bank has completed the process to restore its capital adequacy ratio (CAR) at 11,7% within the regulatory requirements (from 7,2% of December 2005 and 3,6% of September 2005). The target has been reached thanks to the inflow of €500 mln subordinated loan that BRSA authorised for computation in Supplementary Capital.
As of March 31st, 2006 the Bank organisation consisted of a staff of 10.076 employees, a network of 415 branches and around 5,9 mln of active customers.
The Bank is proceeding in line with the timetable for the integration with Koçbank and it is targeting the merger for the last quarter of the year.
Yapı Kredi / 08 May 2006