For the first three months of 2009, Yapı Kredi reported TL 471 mln of net income in its BRSA consolidated financials, closing the first quarter with sound profitability, despite considerable increase in cost of risk, as a result of positive revenue performance and tight cost measures. Continued focus on lending activity to support Yapı Kredi customer base. Solid capital base with CAR at 14.60% at Group level and comfortable liquidity position
On 13 May 2009, Yapı Kredi announced its consolidated first quarter results for 2009 based on Turkish accounting standards (BRSA), reporting TL 471 mln of net income, up 6% y/y. Yapı Kredi continued to focus on lending activity to support its customer base, resulting in further reinforcement of customer relationships. The Bank recorded Return on Average Equity (ROAE) of 27.6% driven by positive revenue performance accompanied by tight cost measures and ongoing efficiency efforts despite considerable increase in cost of risk.
The Bank posted TL 1,491 mln of revenues, up 15% y/y, mainly driven by 33% y/y growth in net interest income supported by interest rate evolution as well as 14% y/y growth in fees and commissions.
In order to counterbalance the challenging environment with lower volumes, a tight cost approach was taken leading to improvement in Cost/Income to 40% (vs 49% in 1Q08).
Despite macroeconomic slowdown, the Bank continued to support its customer base and reported 39.2 bln TL of total loans (+1% year-to-date, above sector) in 1Q09, also impacted by TL depreciation. Deposit volumes were flat at 43.9 bln TL, driven by TL depreciation, lower liquidity pressure and customers’ shift to assets under management due to lower interest rates. Yapı Kredi maintained its no 2 position in assets under management with 18.6% market share by achieving 17% growth in the first quarter of 2009.
Asset quality deterioration which had started in 4Q08 parallel to the sector trend as a result of the global economic crisis, accelerated in 1Q09 mainly driven by SMEs, credit cards and consumer loans. Consequently, Yapı Kredi’s non-performing loan (NPL) ratio increased to 5.3% (vs 4.3% at YE08). So as to control the pace of increase in NPLs and to support customers in temporary difficulty, the Bank put in place mitigating measures in monitoring and collections (including priority actions and restructuring programs) also following the introduction of the new governance and organisation of its credit function.
Sound level of capitalisation, liquidity and funding was maintained in order to cope with continued market volatility and uncertainty. Capital Adequacy Ratio (CAR) increased to 16.13% at Bank level and 14.60% at Group level. Yapı Kredi maintained comfortable Loans/Deposits ratio (89%) in 1Q09. In April 2009, the Bank successfully secured a ~USD 410 mln one-year syndication loan facility with an all-in cost of Libor+2.5%.
As of 1Q09, Yapı Kredi has the fourth largest branch network in Turkey with 856 branches and 9.7% market share. The branch expansion plan, on a temporary stand-by until macroeconomic conditions normalise, continued to bring results above expectations. Yapı Kredi will consider relaunching branch expansion plan in 4Q09 upon the first positive signs of macroeconomic recovery.
Yapı Kredi / 13 May 2009