Brief Description of Yapı Kredi

  • Turkey's first privately-owned commercial bank with a nationwide presence and fourth largest private bank in terms of assets (YTL 64.6 bln as of 1H08).
  • Significant retail franchise with over 5.9 million active customers
  • Offers retail, private, corporate, commercial, SME and investment banking services through a network of 791 branches (including one off-shore branch in Bahrain)
  • Subsidiaries in leasing, factoring, asset management, brokerage, private pensions and life & non-life insurance.
  • International banking operations located in the Netherlands, Russia, and Azerbaijan.
  • Yapı Kredi's principal shareholder, Koç Financial Services (KFS), the 50-50% joint venture between UniCredit and Koç Group, controls a 81.8% stake in the Bank while minorities' stake is 18.2%. The Bank's shares are traded on the Istanbul Stock Exchange and on the London Stock Exchange.

Key Competitive Advantages

  • Large network and leading brand
    • Yapı Kredi has the 3rd largest branch network in Turkey with 791 branches (9.7% market share) as well as one of the most extensive alternative delivery channel networks with 2,200 ATMs and award winning internet and telephone banking applications.
    • The Bank launched an accelerated branch expansion plan in July 2007 with an aim to reach ~1,000 branches by end-2009. 82 new branches were opened in 2007 and 160 new branch openings are planned for 2008 (115 opened in 2008 as of June)
  • Leadership in key segments/products
    • Credit cards (#1 with 23.0% outstanding volume market share, ), asset management (#2 with 18.5% market share), leasing (#1 with 15.1% market share), factoring (#1 with 19.4% market share), private pension funds (#3 with 15.2% market share), life insurance (#5 with 7.0% market share) and non-life insurance (#7 with 5.9% market share)
  • Segment-focused organisation already in place
    • Completed divisionalisation implementation during 1H07
  • Solid Risk Profile
    • Solid credit risk infrastructure, underwriting and monitoring tools
    • No speculative FX open positions
    • 96% of securities portfolio in Held-to-Maturity
  • Quality revenue generation...
    • Sustainable revenue sources with growth potential.
    • Focus on profitable and high growth segments such as SME and consumer lending
    • New products & services in consumer loans leading to rapid increases in market share
      • CARMA(1) project in general purpose loans. As a result, YKB registered market share increase from 3.4% in 1H07 to 5.8% in 1H08
      • Innovative products in mortgages leading to market share increase from 6.8% in 1H07 to 7.7% in 1H08
      • Partnerships with dealers in car loans leading to market share increase from 8.1% in 1H07 to 10.3% in 1H08
  • Focus on efficiency and customer service
    • Launched aggressive transaction migration project in July 2007 with aim of reducing operational workload on branches allowing them to concentrate on sales. Introduced the first barcode-based bill payment system through ATMs in Turkey. As a result, despite accelerated branch expansion, share of branches in total transactions was reduced from 39% in July 2007 to 32% in June 2008.
    • Increased focus on customer satisfaction & retention with use of internationally recognized methodologies. Further improvement in 2008 with customer satisfaction integrated into employee incentive schemes. YKB is the only bank in the sector to assess and track customer satisfaction not only at Bank but on individual branch level
  • Strong Shareholders
    • Ownership structure providing stability and growth potential.
    • Possibility to leverage on Koç Group and UniCredit synergies (cross-selling opportunities through Koç Group companies, tapping into established expertise on risk management standards and practices through UniCredit)
      • ATM sharing with UniCredit: Effective as of 1 October 2007, YKB debit card customers are able to utilize UniCredit ATMs free of charge to withdraw money at more than 15,000 points across 16 European countries. At the same time, UniCredit customers are able to use YKB ATMs in the same way

(1) Centralized Automated Risk Management Approach based on loan offerings with pre-approved limits for ~1.3 mln existing customers.

Yapı Kredi BRSA Consolidated Financials YTL, June 2008
Total Assets (bln) 64.6
Loans (net, bln) 34.1
Deposits (bln) 39.5
AUM (bln) 6.2
Number of Credit Cards (mln) 7.3*
Number of Active Customers (mln) 5.9
Number of Branches   791
Number of ATMs 2,220
Number of Employees  14,821
Paid-in Capital (mln) 3,427
Shareholders’ Equity (mln) 5.4

*Including 1.3 million virtual card