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Finalisation of the Reorganisation of Yapı Kredi's Insurance Business

Yapı Kredi and Allianz reach agreement on the sale of Yapı Kredi’s insurance business and join forces to strengthen leadership in the Turkish market

Yapı Kredi and Allianz reach agreement on the sale of Yapı Kredi’s insurance business and join forces to strengthen leadership in the Turkish market

• Yapı Kredi Group (‘YKB’) to sell its non-life and life insurance businesses to the top tier global insurer Allianz SE (‘Allianz’), valuing 100% of the business at TL 1,906 mln

• YKB to enter into a 15-year exclusive strategic distribution agreement (‘Bancassurance agreement’) to combine Yapı Kredi’s commercial strength in Turkey with Allianz’s global leading expertise in developing and managing insurance products

• Throughout the duration of the Bancassurance agreement YKB expects to receive, in addition to the standard commission flows, a contingent additional performance based commission to ensure alignment of interest between the parties

• At closing, YKB to receive a cash consideration before tax of TL 1,602 mln, with positive impact on its Capital Adequacy Ratio by ~80bps on an unconsolidated basis and ~90bps on a consolidated basis

On 26 March 2013, YKB agreed to sell its non-life and life insurance businesses to Allianz and to establish a 15 year strategic distribution partnership for non-life insurance, life insurance and pension products in Turkey.

As part of this transaction, (i) YKB will sell its 94% stake in Yapı Kredi Sigorta (‘YKS’), including Yapı Kredi Emeklilik (‘YKE’), to Allianz for total consideration of TL 1,790 mln and (ii) YKB will buy-back and retain a total 20% stake in YKE (for a price of TL 188 mln ) in order to benefit from the expected strong growth in the life insurance and pension business in Turkey.

YKB will enter into a 15-year Bancassurance agreement with Allianz for the marketing and distribution of non-life insurance, life insurance and pension products through YKB’s retail network in Turkey. The partnership combines YKB’s customer-focused leading retail franchise in Turkey with Allianz’s global experience and leadership in developing and managing insurance products.

The strategic partnership will allow YKB to expand the range of products and improve the quality of services offered to its customers, leveraging on Allianz’s international experience and operational capabilities. Allianz will strengthen its existing market presence in Turkey, also accessing YKB franchise supported by an integrated network of 928 branches (covering more than 90% of Turkey) complemented by innovative alternative delivery channels.

YKB expects the transaction to increase its Capital Adequacy Ratio by ~80bps on unconsolidated basis and ~90bps on consolidated basis. As of 31 December 2012, YKB had a Capital Adequacy Ratio of 16.3% on unconsolidated basis and 15.2% on consolidated basis.

Mr. H. Faik Açıkalın, Chief Executive Officer of YKB, said: “The Turkish insurance sector has become one of the most prominent markets in recent years thanks to its robust growth supported by the country’s sound macroeconomic fundamentals. During this time, both Yapı Kredi Sigorta, which enjoys a pioneering position in the insurance sector with its performance, and Yapı Kredi Emeklilik, which has a significant place in the lives of its customers with the added value it creates, received considerable and justified interest from several strong international institutions. I would like to underline our pleasure with having reached an agreement with Allianz at the end of this process. The agreement also includes the continued distribution of insurance and pension fund products to customers through our Bank’s extensive branch network. Thus, we have chosen a business partner with whom we can both walk together, consolidate strategic cooperation, and jointly create added value for our customers in the sector.”

Mr. Oliver Bäte, Member of the Board of Management of Allianz SE, said: “Turkey is one of the fastest growing insurance markets worldwide, supported by a robust economic outlook and a large, young population of 75 million people. The transaction with Yapı Kredi Bank is a unique opportunity to move into a market leading position in one of Europe’s key growth markets which is also an important bridge between Europe and Middle East/Central Asia. This transaction fits perfectly into Allianz’s strategy to use bolt-on acquisitions to strengthen its position in growth markets.”

Deutsche Bank A.G., UniCredit Bank Austria A.G. and Yapı Kredi Yatırım Menkul Değerler A.Ş. acted as joint financial advisors on the transaction.

The transaction is expected to close during the second half of 2013 and is subject to regulatory and competition board approvals.

Istanbul, 27 March 2013


Enquiries
: Yapı Kredi Investor Relations
Email: yapikredi_investorrelations@yapikredi.com.tr

Yapı Kredi / 27 Mar 2013

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