Yapi Ve Kredi Bankasi A.s. · BIST:YKBNK
Yapi Ve Kredi Bankasi A.s — Yapı Kredi — Investor Presentation (October 2017)
32 slides from Yapi Ve Kredi Bankasi A.s's investor presentation, October 2017
Slide 1: Yapı Kredi 1H17 Investor Presentation
Yapı Kredi 1H17 Investor Presentation October 2017
Slide 2: Yapı Kredi: A leading financial services group
Yapı Kredi: A leading financial services group Yapı Kredi Overview Ratings Moody’s: Ba2 / Fitch: BBB- / S&P: BB Assets Loans 286.5 185.8 4th largest private bank and deep rooted franchise (established in 1944) bln TL bln TL Shareholders’ Deposits+ Among top 10 most valuable brands 8 in Turkey Equity
Slide 3: Leading positions in value generating services and products
Leading positions in value generating services and products Market Position Market Shares – 1H17 Cash + Non-cash Loans 10.5% Loans 9.7% Total Bank Deposits 10.1% Revenues 9.3% Headcount 9.4% Branches 8.5% Network ATM 8.7% Internet Banking 13.5% Mobile Banking 12.4% Credit Card Outstanding 21.7% Cred
Slide 4: Well-diversified business mix on the back of a customer-oriented and divisionalised service model
Well-diversified business mix on the back of a customer-oriented and divisionalised service model Organizational Structure Revenues and Volumes by Business Unit (1H17) Retail1 53% 44% 60% 99% Private Banking and Corporate and Commercial Individual Retail Banking (incl. Card Wealth Management Banking
Slide 5: Strong and committed shareholders
Strong and committed shareholders Shareholding Structure Stable, long-term focused shareholding structure supporting YKB’s balanced growth and sustainable performance Established in 1926, largest Systemically important Italian financial conglomerate in Turkey and ranks institution in Europe with
Slide 6: Continuation of profitability improvement...
Continuation of profitability improvement... 1.9 bln TL Net Income +41% y/y1 Above private banks’ growth 14.7% ROATE 2 +257 bps y/y Ongoing strong performance in ROATE 41% Cost/Income Ratio -217 bps y/y1 Cost increase 3ppt below inflation 1.10% CoR -26 bps y/y Active asset quality management 11.2% C
Slide 7: ...on the back of sustainable performance
...on the back of sustainable performance 1H17 Summary Profitability Acceleration Strong Operational Performance Net Income ROATE Cost/Income1 CoR (TL mln) 41%1 Revenues +14% Costs +8% 1,893 +257 bps (vs 11% CPI) +40% 1 14.7% 43%2 1,342 +244 bps 41% 1.36% 956 12.1% 1.10% 9.7% 1H15 1H16 1H17 1H15 1H1
Slide 8: Optimized volume growth supporting the profitability
Optimized volume growth supporting the profitability Volumes Lending (TL bln) Funding (TL bln) Deposits +5% ytd driven by FX deposits changing the Loans +5% ytd driven by TL company lending overall mix 1 YKB Private Banks1 YKB Private Banks 1H17 y/y ytd y/y ytd 1H17 y/y ytd y/y ytd Cash + Non-Cash L
Slide 9: Core revenues and asset quality drive the profit improvement
Core revenues and asset quality drive the profit improvement Income Statement P&L Effective performance in all lines leading to TL 892 mln quarterly net income (+40% y/y excl. Visa income in 2Q16) Quarterly Cumulative 1 1 TL mln 2Q16 1Q17 2Q17 q/q y/y 1H16 1H17 y/y Total Revenues (excl . Vi s a ) 3,
Slide 10: Sustainable revenue growth through double digit NII increase
Sustainable revenue growth through double digit NII increase Revenues NIM (bank-only) Swap Adjusted NIM (bank-only)2 Quarterly Cumulative Quarterly Cumulative Stable NIM q/q; 3.4% 3.4% 3.4% 3.2% 3.1% 3.1% Revenue Breakdown (TL) 3.3% 2.9% swap adjusted NIM -29 bps q/q due to increasing swap costs +14
Slide 11: Decline in loan-deposit spread due to increase in TL funding costs
Decline in loan-deposit spread due to increase in TL funding costs Loan-Deposit Spread Loan Yields Deposit Costs Loan-Deposit Spread (Quarterly) (Quarterly) (Quarterly) Loan yields maintained with Loan-Deposit spread came down Increase in deposit costs driven ongoing efforts on loan repricing 50bps
Slide 12: Disciplined cost performance sustained
Disciplined cost performance sustained Costs Cost Breakdown (TL) Cost KPIs Below inflation cost performance showing Cost / Income down to 40.5% results of effective optimisation efforts together with improvement in all cost KPIs Cost / Income2 vs CPI at 11% -217 bps +8% 42.7% 40.5% 2.8 bln 2.6 bln +
Slide 13: Digital transformation on track on the back of increasing digital customers
Digital transformation on track on the back of increasing digital customers 1 Higher market share in digital vs 12.3% digital customer market share vs 9% market physical network share in physical network Digital and mobile banking customers 3.8mln customers (2x vs 2014) with 45% digital increase
Slide 14: Focus on asset quality paying off – Conservative and proactive approach intact
Focus on asset quality paying off – Conservative and proactive approach intact Asset Quality NPL Ratio Watch + Restructured Loans Improvement in NPL ratio through slowdown in Decline in watch portfolio with conservative approach on NPL inflows as well as positive impact of NPL sales1 restructuring m
Slide 15: Stable coverage levels despite TL 1.3bln of NPL sale
Stable coverage levels despite TL 1.3bln of NPL sale Asset Quality NPL Coverage Cost of Risk3 (Cumulative, net of collections) Total coverage ratio at 113%; Total cost of risk -26 bps y/y supported by improving NPL sale impact on specific coverage -250 bps q/q in collections 2Q17 (-410 bps ytd in 1H
Slide 16: Improving capital ratios with ongoing internal capital generation
Improving capital ratios with ongoing internal capital generation Capital Capital Ratios (Bank) CAR CET1 Internal Capital Generation continues to support 14.8% 14.2% 14.4% Capital Ratios 10.6% 10.7% 11.2% 1 Min 6.5% Min 5.5% CAR Evolution 2016 1Q17 1H17 2016 1Q17 1H17 Consolidated +43bps 14.8% 14.2%
Slide 17: Confirming 2017 Guidance
Confirming 2017 Guidance Outlook 1H17 2017B (y/y) Volume Growth Loans 15% 10 - 12% Deposits 19% 10 - 12% Revenues and Costs NIM Flattish Flattish Fees 9% 10% Costs 3pp below CPI 2-3pp below CPI Cost/Income 41% 42% Asset Quality NPL ratio (ytd) -46 bps Flattish Specific CoR (ytd) -11 bps Stable Funda
Slide 18: Closing remarks
Closing remarks Continuation of strong performance with ROATE at 14.7%, despite the uptick in funding costs All three phases of the strategy paying off: • Revenue growth: consistently strong performance with around 15% y/y growth in total revenues for the last 10 quarters • Cost elimination: under c
Slide 19: Annex
Ge yYanikredi 9
Slide 20: A more supportive macro environment shed by hike in funding costs
A more supportive macro environment shed by hike in funding costs Operating Environment Macro Environment Banking Sector Stabilization of volatile macro environment in Banking sector remaining resilient despite the second quarter with improvement in increasing TL funding costs. inflation, consumer c
Slide 21: Consolidated Balance Sheet
Consolidated Balance Sheet TL bln 1Q15 1H15 9M15 YE15 1Q16 1H16 9M16 2016 1Q17 1H17 q/q y/y Assets Total Assets 215.5 223.8 247.8 235.3 237.9 245.8 248.1 271.1 281.4 286.5 2% 17% Loans 135.5 142.8 153.7 152.5 154.6 161.3 161.6 176.5 183.7 185.8 1% 15% Other Assets TL Loans 89.3 93.8 97.1 97.7 99.0 1
Slide 22: Consolidated Income Statement
Consolidated Income Statement TL million 1Q16 2Q16 1 3Q16 4Q16 1Q17 2Q17 q/q y/y 1H16 1 1H17 y/y Total Revenues 3,063 3,000 3,189 3,156 3,529 3,363 -5% 12% 6,063 6,892 14% Core Revenues 2,704 2,689 2,922 2,878 3,100 3,147 2% 17% 5,393 6,247 16% Net Interest Income 1,952 1,911 2,217 2,141 2,251 2,321
Slide 23: Bank-Only Income Statement
Bank-Only Income Statement TL million 1Q16 2Q16 1 3Q16 4Q16 1Q17 2Q17 q/q y/y 1H16 1 1H17 y/y Total Revenues 2,950 2,893 3,083 3,023 3,401 3,231 -5% 12% 5,843 6,632 14% Net Interest Income 1,821 1,772 2,065 1,976 2,141 2,174 2% 23% 3,594 4,315 20% o/w CPI-linkers 313 137 287 212 325 338 4% 146% 450
Slide 24: Securities
Securities Securities1/Assets Composition by Currency (TL bln) Composition by Type1 YKB Private banks 30.0 28.7 32.4 0.4% 0.1% 0.2% Trading 26% HTM 39% 36% 13.9% 13.0% 13.1% 68% 67% 70% 11.7% 11.3% 11.1% TL 70% FRN 71% FRN 69% FRN 73% AFS 61% 64% FC 32% 33% 30% 2% FRN 3% FRN 3% FRN 1H16 2016 1H17 1H
Slide 25: International funding: syndications and securitisations
Borrowings: 21% of total liabilities ~ US$ 2.5 bln outstanding May’17: US$ 306 mln & € 956.5 mln, all-in cost at Libor+ 1.45% and Euribor+ 1.35% for the 367 day tranche and Libor+ 2.20 % and Euribor+ 2.10 % for Syndications the 2 year and 1 day tranche, respectively. 48 banks from 19 countries 2Q1
Slide 26: Koç Group financial highlights
Financial Highlights Established in 1926, Turkey's largest industrial and services group in terms of (in EUR, 1H17) turnover and exports 419th largest company in the world1 Leading positions with strong competitive advantages in energy, automotive, Total Assets (bln) 23.3 consumer durables, fi
Slide 27: UniCredit financial highlights
Financial Highlights (in EUR, 1H17) Roots dating back to 1473. Created through the merger of 9 of Italy's largest banks and the subsequent combination with the German HVB Group and the Italian Capitalia Total Assets (bln) 827 Group A major international financial institution based in Italy with
Slide 28: Turkey: A large and dynamic country with solid growth potential
Turkey: A large and dynamic country with solid growth potential and resilient fundamentals Turkey TR 2015 EU 2015 Population (mln) 79 508 Europe’s 8th largest economy and a member of Median Age 30 43 G20 Population Growth Turkey 1.4% 0.4% (CAGR 2000-2015) Young, dynamic, large and growing popula
Slide 29: Turkish banking sector still underpenetrated in household lending
Despite solid growth in recent years, Turkish banking sector still underpenetrated in household lending Banking Sector Penetration Branches Per Million Inhabitants Total Loans1/GDP Corporate Loans/GDP (2016) 141% 126% 128% 394 50% 111% 48% 65% 44% 136 38% 59% 36% 17% EU28 Turkey 2009 2010 2011 2012
Slide 30: Healthy banking sector, resilient against external shocks
Healthy banking sector, resilient against external shocks and supporting economic growth Banking Sector Banking Sector 2012 2013 2014 2015 2016 1Q17 1H17 Well regulated (BRSA est. in 2001) Banking Sector Banks # 46 48 48 48 47 47 46 Best practices in technology: payment systems and Branches # 10
Slide 31: CBRT rates
CBRT rates 12.0% 11.6% 11.8% 10.9% CBRT upper band 11.6% 11.3% 10.0% 9.25% 9.3% 9.0% 8.5% 8,3% CBRT lower band 7,8% 7.25% 31-Dec' 15 31-Jan' 16 29-Feb'16 31-M ar'16 30-Apr'16 31-M ay '16 30-Jun'16 31-Jul'16 31-Aug '16 30-S ep'16 31-O ct'16 30-N ov '16 31-Dec' 16 31-Jan' 17 28-Feb'17 31-M ar'17 30-Ap
Slide 32: Credit Ratings
Credit Ratings Long-Term Foreign Currency Long-Term Local Currency Rating Outlook Rating Outlook Yapı Kredi Ba2 * Negative Ba1 Negative Ba2 Garanti Negative Ba1 Negative Ba1 Akbank Ba2 Negative Negative Işbank Ba2 Negative Ba1 Negative Halkbank Ba2 Negative Ba1 Negative Vakıfbank Ba2 Negative Ba1 Ne