On 30 July 2021, Yapı Kredi announced its consolidated results for the first six months of 2021 based on Turkish accounting standards (Banking Regulation and Supervision Agency). The Bank’s cash and non-cash loans reached TL 441.0 billion while total deposits reached to TL 298.6 billion. The Bank’s net income reached TL 3,685 million indicating a return on average tangible equity of 15.4%.
Local currency driven loan and deposit growth with a solid liquidity
In the first half of the year, The Bank achieved 12.9% year-to-date growth in performing loans to TL 318.1 billion, mainly driven by Turkish Lira. During the same period, the Bank’s customer deposit growth was at 13.7% year-to-date and reached TL 294.9 billion. Also, the share of demand deposits in total improved 132 basis points year-to-date to 37% within the scope of continued focus on small tickets in deposit gathering. Accordingly, loan-to-deposits plus Turkish Lira bonds ratio reached to 104%. The Bank’s total and foreign currency liquidity coverage ratios realized at 157% and 503%, respectively.
Prudent and conservative asset quality approach
In the first six months of 2021, Yapı Kredi’s non-performing loan ratio improved to 5.1% (Comparable: 5.2%). Compared to 2020, non-performing loan inflows declined with strength in collections, resulting in improvement in cost of risk with elevated coverages. Accordingly, cumulative cost of risk (adjusted for hedged foreign currency impact) materialised at 60 basis points in the first half of 2021. Provisions to gross loans stood at 7.2%.
Strong capital ratios and ongoing internal capital generation
In the first half of 2021, despite the negative impact coming from the market and currency volatility the capital ratios of the Bank were supported by ongoing internal capital generation through profitability and optimization efforts and by the contribution from the IRB adoption. Hence, consolidated Capital Adequacy Ratio, Tier-1 ratio and Common Equity Tier-1 ratio realised at 16.2%, 13.8% and 12.4%, respectively, excluding regulatory forbearances.
Solid top-line improving asset quality and strong liquidity
In the first six months of the year, Yapı Kredi recorded TL 9,827 million of core banking revenues. Thanks to the ongoing repricing, strong demand deposit performance supporting cost of funding, net interest margin excluding linkers widened 27 basis points on a quarterly basis. With the support from CPI linker securities, swap adjusted net interest margin improved 61 basis points to 2.7% over the first quarter. Yapı Kredi witnessed a substantial 31.3% improvement in year-over-year fee growth across the board thanks to ongoing diversification efforts, reaching to TL 3.632 million. Operating costs increased by 16% year over year -below average inflation- to TL 4,735 million. All in all, the Bank achieved a net income of TL 3,685 million and 15.4% return on average tangible equity.