On 10 February 2014, Yapı Kredi announced its consolidated 2013 results based on Turkish accounting standards (BRSA), reporting TL 3,659 mln (+74% y/y) net income and 25.7% return on average tangible equity (ROATE). Excluding capital gain of 1,284 mln TL¹ (post tax) from sale of insurance business, net income was realised at TL 2,375 mln (+13% y/y) corresponding to ROATE of 16.7%.

In 2013, Yapı Kredi effectively strengthened its capital and liquidity while maintaining its resilient performance.

• Bank-only capital adequacy ratio was realised at 16.0%, among the highest in the sector, despite market volatility. Focused actions taken during the year included sale of insurance business, securities portfolio repositioning, renewal of sub-debt and risk weighted asset optimisation.
• Bank-only loans to deposit ratio was maintained stable at 110% compared to +8pp increase in the sector to 111%. The Bank realised timely wholesale funding issuances towards the end of the year and accordingly already finalised 50% of its additional funding needs for 2014. Issuances included a 5 year US$ 500 mln Eurobond in Dec’13 at 5.25% coupon rate, renewal of US$ 470 mln sub-loan in Dec’13 and launch of new Global Medium Term Note (GMTN) programme which already exceeded US$ 850 mln.

In terms of volumes, total loans increased by 28% y/y driven by both consumer (+25% y/y) and company lending (+29% y/y). Loans to assets ratio increased to 62% (vs 59% YE12) while securities to assets ratio declined to 14% (17% YE12) confirming the Bank’s continuous customer-business focus. On the other hand, total deposits increased by 24% driven mainly by foreign currency deposits. Throughout the year, Yapı Kredi focused on disciplined pricing due to comfortable liquidity position.

Yapı Kredi recorded healthy growth of 13% in total revenues up to TL 8,058 mln driven by strong contribution of core revenues (89% of total revenues) and positive impact of other income. Cumulative net interest margin was in line with guidance at 3.7% (-40 bps y/y) confirming the Bank’s ability to navigate in a challenging rate environment. Fee growth was realised at 15% y/y driven by value generating lending growth as well as positive contribution of asset management and bancassurance. Yapı Kredi sustained its discipline in cost management with 12% y/y growth (9% on a comparable basis²) driven by strict management of ordinary costs and ongoing investments for growth. Accordingly, cost/income ratio was realised at 44%.

Asset quality remained intact. NPL ratio was realised as 3.5% (vs 3.2% in YE12), also incorporating TL 202 mln NPL portfolio sale in the fourth quarter. Cost of risk (net of collections) decreased to 1.27% from 1.35% in 2012 while specific coverage increased to 67% (vs 62% at YE12).

As of the end of 2013, Yapı Kredi served 8.8 million customers through 949 branches covering all regions of Turkey. In addition, Yapı Kredi has advanced delivery channels (ADCs) which handle 83% of total banking transactions. These ADCs comprise of 3,000 ATMs, innovative internet banking, leading mobile banking and two award winning call centres.

Istanbul, 10 February 2014
Inquiries:Yapı Kredi Investor Relations
Tel: (90) (212) 339 7323
Email: yapikredi_investorrelations@yapikredi.com.tr

1. On 12 July 2013, sale of insurance business to Allianz was finalised. Accordingly, YKB sold its 94% stake in YK Sigorta which owns 100% of YK Emeklilik. 20% stake in YK Emeklilik is retained. Consolidated capital gain is TL 1,284 mln post 5% capital gain tax (bank-only capital gain is TL 1,174 mln post-tax). Previous periods have been restated to reflect insurance business sale for comparability purposes.
2. Costs excluding: (i) 32 mln TL competition board fine in 3Q (ii) regulatory costs (ie SDIF premium increase, SDIF penalty and other) (iii) impact of retail business expansion in Azerbaijan