Profitability acceleration and intact fundamentals
On 29 July 2016, Yapı Kredi announced its consolidated 2016 first half results based on Turkish accounting standards (BRSA), reporting TL 1,552 million net income and cumulative tangible return on equity was recorded as 14.0%. Quarterly net income was recorded at TL 848 million.
Strong revenue growth and disciplined cost management resulting in solid operational performance
In the first half of 2016, Yapı Kredi increased its total revenues by 20% year-over-year supported by strong 16% year-over-year growth in fees and commissions and expanding loan-deposit spread. Other revenues also contributed positively, mainly driven by lower swap costs and TL 235 million pre-tax contribution of Visa share sale gain. Discipline in cost management was evident with cost growth of 7% year-over-year, in line with guidance and in line with inflation. Accordingly, cost/income ratio improved by 5 percentage point to 43%.
Balanced growth in loans and deposits
During the first half of the year, Yapı Kredi’s market share in both loans and deposits remained relatively stable and was realized at 10.4% and 10.2%, respectively.
In terms of lending, Yapı Kredi recorded 6% year-to-date growth in loans up to TL 161.3 billion with a balanced mix among consumer and corporate/commercial lending. Accordingly, the Bank’s year-over-year loan growth reached 13%, in line with the full-year guidance. In terms of funding, Yapı Kredi’s deposit growth was in line with loan growth at 6% year-to-date to TL 137.7 billion. Demand deposits, a strong focus area for the bank, increased by 13% year-to-date compared to 8% growth at sector level.
Comfortable capitalisation and solid liquidity profile
The capitalization of the Bank has been improving consistently compared to the end of 2015 thanks to strong profitability, focus on effective capital usage and issuance of US$500 mln sub-loan in March 2016. Capital Adequacy Ratio increased by 65 basis points year-to-date to 13.6% and Common Equity Tier-1 ratio increased by 37 basis points year-to-date to 10.3%. In the same period, the Bank was able to keep its loan-to-deposits plus TL bonds ratio flat compared to the end of 2015 at 114%, in line with guidance.
In terms of funding, the Bank successfully renewed its syndicated loan in May 2016 with the participation of 48 banks from 15 countries and a roll over ratio above 101%. The loan facility has US$381 million and €959.1 million tranches with a cost of Libor/Euribor+0.75% per annum.
Asset quality in line with guidance
In the second quarter of 2016, non-performing loans ratio was realized at 4.3% impacted by some pressure on collections. Specific coverage remained flat at 76% while cost of risk (net of collections) was realised at 1.36% in the first half of 2016 compared to 1.45% in same period of 2015.
Istanbul, 29 July 2016
Enquiries: Yapı Kredi Investor Relations
Tel: (90) (212) 339 7323
Email: yapikredi_investorrelations@yapikredi.com.tr
Yapı Kredi / 29 Jul 2016