We Are Here For You

2013 Earnings Release

Robust base, resilient performance

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

Yapı Kredi / 10 Feb 2014