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On 3 February 2021, Yapı Kredi announced its consolidated results for 2020 based on Turkish accounting standards (Banking Regulation and Supervision Agency). The Bank’s cash and non-cash loans reached TL 382.7 billion while total deposits reached to TL 264.4 billion. The Bank’s net income reached TL 5,080 million indicating a return on average tangible equity of 12.0%.
Local currency driven loan and deposit growth with a solid liquidity
In 2020, The Bank achieved 22.9% yearly growth in loans to TL 281.8 billion, mainly driven by Turkish Lira loans. During the same period, the Bank’s customer deposit growth was at 14.7% and reached TL 259.3 billion. Also, the Bank increased its Turkish Lira demand deposit market share by 70 basis points to 16.4% and foreign currency demand deposit market share by 9 basis points to 13.6% on a year over year basis within the scope of continued focus on small tickets in deposit gathering. Accordingly, loan-to-deposits plus Turkish Lira bonds ratio reached to 105%. The Bank’s total and foreign currency liquidity coverage ratios realized at 148% and 454%, respectively. The Bank had ample level of liquidity as of the end of 2020 corresponding to 3.4 times above the short-term foreign currency debt.
Prudent and conservative asset quality approach
In 2020, Yapı Kredi maintained its precautious approach in terms of asset quality. The Bank’s non-performing loan ratio materialized at 6.4% (Comparable: 6.8%). Compared to 2019, non-performing loan inflows declined with strength in collections, resulting in improvement in cost of risk despite increasing coverages. Accordingly, cost of risk (adjusted for hedged foreign currency impact) improved by 41 basis points to 251 basis points. With the ongoing conservative provisioning approach of Yapı Kredi, provisions to gross loans reached to 8.1%.
Strong capital ratios and ongoing internal capital generation
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 in 2020. Hence, consolidated Capital Adequacy Ratio, Tier-1 ratio and Common Equity Tier-1 ratio realised at 16.7%, 13.6% and 12.4%, respectively, excluding regulatory forbearances.
Solid top-line within conservative asset quality approach and liquidity
In 2020, Yapı Kredi increased its core banking revenues by 16.9% year-over-year. Thanks to execution of sound, timely and proactive asset liability management strategy, a successful loan-deposit spread was achieved, resulting in improvement in swap adjusted net interest margin compared to 2019 by 48 basis points to 3.78%. Cost-to-income ratio improved by 154 basis points year over year to 33.4%. All in all, the Bank achieved a net income of TL 5,080 million and 12.0% return on average tangible equity