Majority of investments finalised, profitability acceleration expected
On 2 February 2016, Yapı Kredi announced its consolidated 2015 results based on Turkish accounting standards (BRSA), reporting TL 1,909 million net income and 9.7% return on average tangible equity (RoATE). On a quarterly basis, net income was realised as TL 635 million, indicating a RoATE of 12.3%.
Sustained focus on growth despite challenging environment
In 2015, Yapı Kredi completed the majority of its growth related investments with 77 new branches, ~1,300 new ATMs and 2,661 increase in headcount over the last two years. A key achievement of the growth strategy was the significant acceleration in customer acquisition. Yapı Kredi acquired 1.2 million customers in this two-year period. At the same time, the Bank continued its strong focus on digitalization and increased the number of active digital customers by 129% in 2 years up to 4.1 million.
Desired scale reached with continued shift towards value generating products
Total cash and non-cash loans grew by 21% year-to-date reaching a market share of 11%. Total cash loan growth reached 21% ytd vs 18% private banks. Loan book remix continued towards high-value generating segments driven by SME loans (+35% ytd) and general purpose loans (+37% ytd). Accordingly, share of retail loans (including SME) increased by 4 percentage points in 2 years to 30% on an FC-adjusted basis.
In terms of deposits, above sector performance continued and the Bank recorded 21% ytd growth (vs 18% private banks). Deposit growth was mainly driven by foreign currency deposits due to shift by companies in order to manage the volatile environment while individual deposit growth continued to be driven by local currency. Over the last 2 years, Yapı Kredi has gained a total of 170 bps and 150 bps of market share compared to private banks in loans and deposits, respectively.
Solid commercial performance continued
In 2015, Yapı Kredi improved its core revenues by 20% y/y (vs 14% private banks) supported by 20% and 21% year-over-year growth in net interest income and fees & commissions, respectively. In 4Q, loan-deposit spread was flat supported by positive impact of TL loan upward repricing and controlled deposit costs despite currency impact on FC loan yields. Cost growth, realised at 22% y/y, was impacted by base effect of growth investments and fee rebates. Disciplined cost approach is expected to be visible in 2016 due to completion of majority of investments.
Capital adequacy ratio improved by 90 bps q/q in 4Q15 supported by normalization in operating environment and ongoing focus on effective capital usage. CAR was recorded as 13.8% while Tier-1 ratio was 10.3%, in line with guidance.
In 4Q15, NPL ratio realised at 3.9% while restructured loan ratio decreased by 12 basis points to 1.0%. At the same time, NPL coverage increased by 3 pp q/q to 75%.