Yapi Ve Kredi Bankasi A.s. · BIST:YKBNK
Yapi Ve Kredi Bankasi A.s — Yapı Kredi — Q1 2020 Earnings Presentation
33 slides from Yapi Ve Kredi Bankasi A.s's earnings presentation, 2020
Slide 1: Yapı Kredi 1Q20 Investor Presentation
#StayAtHome #WeWillGetBetter Yapı Kredi 1Q20 Investor Presentation
Slide 2: Yapı Kredi: A leading financial services group
Yapı Kredi: A leading financial services group Yapı Kredi Overview Key Figures – 1Q20 Market Share – 1Q20 Ratings Moody’s: B3 / Fitch: B+ Market Share5 Cash & Non-cash Loans 9.3% Total Assets Loans1 Total Bank 434.9 242.4 Customer Deposits 9.4% bln TL bln TL Corporate Loans6 8.2% 2 Net Income RoATE
Slide 3: Well-diversified commercial business mix and customer-oriented service model
Well-diversified commercial business mix and customer-oriented service model Corporate and Commercial Banking Retail Banking SME Private Corporate Commercial International/ Individual Turnover Turnover Banking1 Banking Credit Cards >USD 100 mln USD 10-100 mln Multinational Banking Turnover Total <US
Slide 4: Stable, long-term focused majority shareholder supporting Yapı Kredi’s strategy
Stable, long-term focused majority shareholder supporting Yapı Kredi’s strategy Largest business group in Turkey with combined Free Float revenue equal to 8% of Turkey’s GDP 30.03% Koç Holding 2019 Koç Group 49.97% Total Assets (EUR bln) 22.6 Revenues (EUR mln) 24,185 UniCredit Net Income (EUR mln)
Slide 5: Covid-19 time-line in Turkey and Yapı Kredi’s actions
Covid-19 time-line in Turkey and Yapı Kredi’s actions 11 March 21 March 3 April 10 April First Confirmed First Further First Curfew at Case in Turkey Restrictions Restrictions Weekend PREVENTIVE ACTIONS • Crisis management • 10,000+ employees • Branches started to work • Branch back-up process activ
Slide 6: Covid-19 Actions and implications: Safety of franchise first
Covid-19 Actions and implications: Safety of franchise first and foremost, with sustained customer service alongside with solid fundamentals 75% of the work-force moved to home-office (all head-quarter, call center and rotated network) Employees Kept Rotated branch employees using remote custome
Slide 7: Ample level of liquidity 3.8x of ST FC external debt
Ample level of liquidity 3.8x of ST FC external debt ST1 FC External Liquidity Debt Short Term Funding (bln USD) Total 2Q20 3Q20 4Q20 1Q21 Tier I & II 0.0 0.0 0.0 0.0 0.0 Senior Bonds 0.0 0.0 0.0 0.0 0.0 Short Term Securitizations & Supranational Funding 0.4 0.1 0.1 0.1 0.1 (1 year) Syndications 2.0
Slide 8: 1.1 bln TL net profit with strong PPP generation and cautious provisioning
1.1 bln TL net profit with strong PPP generation and cautious provisioning supported by solid fundamentals 1 Net Profit Pre-Provision Profit Total Provisions2 +23% 2,238 3,676 1,241 1,610 1,129 2,995 PPP/Gross 4.7% 5.5% 1,268 Ordinary RoTE 13.3% 11.4% Loans Provisions 1Q19 1Q20 1Q19 1Q20 1Q19 1Q20 F
Slide 9: TL driven loan and deposit growth, with enhanced focus on small tickets
TL driven loan and deposit growth, with enhanced focus on small tickets Volumes Loan volumes (TL bln) Deposit volumes (TL bln) 1 Yapı Kredi Private Banks1 Yapı Kredi Private Banks 1Q20 ytd y/y ytd y/y 1Q20 ytd y/y ytd y/y Cash+Non-cash Loans2 336.6 6% 4% 7% 8% Customer Deposits 247.2 9% 15% 7% 19% 3
Slide 10: Well diversified loan portfolio and sound coverage sectors with possibility of deterioration
Well diversified loan portfolio and sound coverage sectors with possibility of deterioration Lending Sectoral breakdown of Loans Energy Sector total coverage at 14.6%, 46.6% of the 14 sectors; 11% Commercial RE loans are under Stage 2 Chemicals 1.8% Business Services 1.8% 1.9% Energy Sector Risk
Slide 11: Strong y/y increase in core revenues, with 21 bps ytd improvement in revenue margin
Strong y/y increase in core revenues, with 21 bps ytd improvement in revenue margin Revenues Revenues1;2,3 (TL mln) Core Revenue Margin Cumulative +21bps +22% 5.2% 5.0% 5,738 4,707 2019 1Q20 5,124 Core2;3 Quarterly 4,251 5.0% 4.9% 5.2% 5.2% 4.8% Other1 634 456 1Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 Note
Slide 12: Expansion in NIM on a ytd basis, thanks to better Core NIM evolution
Expansion in NIM on a ytd basis, thanks to better Core NIM evolution Revenues - NIM Swap Adjusted NIM NIM Evolution Cumulative Core NIM: +97 bps +21bps +18bps +211bps -17bps -18bps 3.68% 3.47% -28bps -13bps 3.5% 3.7% -132bps 2019 1Q20 2019 Loan Yield Deposit Swap Securities RRs Other Fee 1Q20 Cost C
Slide 13: Successful widening in loan-deposit spread thanks to execution of sound ALM strategy
Successful widening in loan-deposit spread thanks to execution of sound ALM strategy Loan-Deposit Spread Loan – Deposit Spread Evolution Loan-Deposit Spread Deposit Costs Loan Yields (Quarterly) (Quarterly) (Quarterly) 143 bps improvement in total cost 57 bps wider Loan-Deposit spread Controlled dec
Slide 14: Fees still strong on a y/y basis… Under pressure due to regulation change
Fees still strong on a y/y basis… Under pressure due to regulation change and less commercial activity Revenues - Fees Net Fee Income (TL mln) 1 Transaction Numbers (monthly average) +14% Money Transfers Payment Systems -4% +26% +10% 1,587 1,521 1,337 1Q19 1Q20 1Q19 1Q20 Strong transaction numbers…
Slide 15: Cost growth mainly impacted by elevated regulatory costs and actions taken against Covid-19
Cost growth mainly impacted by elevated regulatory costs and actions taken against Covid-19 Costs Costs1 (TL mln) Share of Digital in Main Products4 Sold +11pp Yearly +20% -3% 47% 2,122 2,062 36% 1,712 31% 26% 20% Cost/Income2 34.9% 40.4% 36.2% 1Q19 4Q19 1Q20 2016 2017 2018 2019 1Q20 Cost Breakdown
Slide 16: Improvement in CoR due to limited NPL inflows with further cautious increase in coverages
Improvement in CoR due to limited NPL inflows with further cautious increase in coverages Asset Quality Total Cost of Risk1,2 Cumulative Quarterly -24bps 2.68% 2.19% 2.92% 2.68% Ordinary 1.86% CoR 1.86% Ordinary CoR 2019 1Q20 1Q19 1Q20 Cost of Risk Composition 62bps 330bps 83bps 268bps + Ordinary Co
Slide 17: NPL formation was supportive in 1Q20, in all segments with strength in collections
NPL formation was supportive in 1Q20, in all segments with strength in collections Net NPL inflows (monthly average) -83% -87% 721 601 -40% 127 86 80 51 34 -4 Consumer & CC SMEs Corp&Comm Total 2019 1Q20 NPL inflows (monthly average) Recoveries (monthly average) -64% +25% -75% 183 867 +31% 147 667 +
Slide 18: Improvement in asset quality with further increase in coverages
Improvement in asset quality with further increase in coverages despite write-off of fully covered files… Asset Quality Provisions / Gross Loans 0.6% 0.6% Highest coverage 110% 109% 108% 0.7% among peers1 107% 106% 105% 104% 103% 102% 101% 0% 100% 99% 98% 97% 96% 95% 94% 93% 92% 91% -2% 90% 80% Stag
Slide 19: Capital ratios 350-400 bps above regulatory requirements
Capital ratios 350-400 bps above regulatory requirements despite negative impact arising from macro environment Capital Capital Ratios CET1 Tier1 CAR 16.7% 14.8% 15.8% 13.7% 13.0% 12.5% 11.8% 11.4% 11.4% 12.0% 9.55% 8.05% 2018 2019 1Q20 1Q20 2018 2019 1Q20 2018 2019 1Q20 1Q20 w/o forbearance w/o for
Slide 20: 2020 Guidance
2020 Guidance 2020 Potential Reasons Guidance LDR ≤ 105% No Risk - Fundamentals Slight Slight downside risk due to macro economic CAR ≥ 16% Downside Risk developments Volumes TL Loans High-teens Downside Risk Slight downside risk due to slowdown in demand Slight NIM ≥ 3.7% Lower commercial activity
Slide 21: Annex
Annex
Slide 22: Macro Environment and Banking Sector
Macro Environment and Banking Sector Macro Environment Banking Sector Normalization trend on all macro lines in the first two Strong fundamentals of the sector with ongoing months of 2020, with potential negative impact arising support to the economy during times with uncertainty from Covid-19 2017
Slide 23: Consolidated Balance Sheet
Consolidated Balance Sheet TL bln 1Q18 1H18 9M18 2018 1Q19 1H19 9M19 2019 1Q20 q/q y/y Assets Total Assets 328.7 365.1 422.0 373.4 393.4 409.0 396.9 411.2 434.9 6% 11% 4 Other Assets Loans 1 205.3 222.2 249.4 220.5 230.5 232.3 222.4 229.4 242.4 6% 5% 6% TL Loans 118.8 123.0 124.8 117.3 121.8 128.0 1
Slide 24: Consolidated Income Statement
Consolidated Income Statement TL million 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 q/q y/y Net Interest Income including swap costs 2,543 2,778 4,004 4,239 3,112 3,241 3,254 3,329 3,582 8% 15% o/w NII 2,845 3,209 4,311 4,131 3,485 4,041 4,079 3,926 4,210 7% 21% o/w CPI-linkers 436 460 1,360 2,478
Slide 25: Bank-Only Income Statement
Bank-Only Income Statement TL million 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 q/q y/y Net Interest Income including swap costs 2,270 2,585 3,677 3,925 2,806 2,936 2,973 3,046 3,326 9% 19% o/w NII 2,768 3,108 4,143 3,923 3,356 3,869 3,827 3,723 3,973 7% 18% o/w CPI-linkers 436 460 1,360 2,478 78
Slide 26: Securities
Securities 1 Securities/Assets Composition by Type Composition by Classification1 TL Securities (bln TL) FC Securities (bln USD) 0.7% 1.0% 0.8% 73% of total 27% of total 40.9 44.4 2.6 47% 13.9% 14.4% 37.2 2.4 2.5 52% 53% 13.2% 28% 29% 35% 92% 97% 96% 67% 53% 47% 46% 65% 58% 3% 4% 1Q19 2019 1Q20 7% 6
Slide 27: Details of main Borrowings
Details of main Borrowings ~ US$ 2.0 bln Syndications May’19: US$ 350 mln and € 607 mln, all-in cost at Libor+ 2.50% and Euribor+ 2.40% for 367 days. 49 banks from 21 countries Oct’19: US$ 370 mln & € 520 mln, all-in cost at Libor+ 2.25% and Euribor+ 2.10% for 367 days. 39 banks from 21 countrie
Slide 28: Despite solid growth in recent years, 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 Total Loans1/GDP Corporate Loans/GDP Million Inhabitants (2018) 160% 46% 138% 44% 125% 41% 109% 346 34% 60% 122 58% 16% EU28 Turkey 2009 2010 2011 2012 2013
Slide 29: Healthy banking sector, resilient against external shocks and supporting economic growth
Healthy banking sector, resilient against external shocks and supporting economic growth Banking Sector Well regulated (BRSA est. in 2001) Banking Sector Banking Sector 2017 9M18 2018 1Q19 1H19 9M19 2019 1Q20 Best practices in technology: payment systems Banks # 51 52 47 47 53 53 53 53 and well-
Slide 30: CBRT rates
CBRT rates Policy Rate 2015 7.50% 2016 8.00% 2017 8.00% 2018 24.00% 2019 12.00% 26.6% 24.8% 1Q20 9.75% 24.00% Current 8.75% 18.2% 19.59% 21.1% 16.1% 19.25% 12.93% 13.86% 15.6% 10.9% 11.4% 11.94% 12.75% 8.8% 11.94% 10.31% 8.35% 8.81% 8.90% 8.34% 7.77% Feb-16 Sep-16 Feb-17 Sep-17 Feb-18 Sep-18 Feb-19
Slide 31: Credit Ratings
Credit Ratings Long-Term Foreign Currency Long-Term Local Currency Rating Outlook Rating Outlook Turkey B1 Negative B1 Negative Yapı Kredi B3 Negative B2 Negative Garanti B3 Negative B2 Negative Akbank B3 Negative B2 Negative Işbank B3 Negative B3 Negative Halkbank B3 Negative B3 Negative Vakıfbank
Slide 32: Contact investor relations
Contact investor relations Yapı ve Kredi Bankası Head Office Yapı Kredi Plaza D Blok Levent 34330 Istanbul - TURKEY Tel: +90 (212) 339 67 70 Email: yapikredi_investorrelations@yapikredi.com.tr Web: http://www.yapikredi.com.tr/en/investor-relations Kürşad KETECİ - Strategic Planning and Investor Rela
Slide 33: Disclaimer
Disclaimer This presentation has been prepared by Yapı ve Kredi Bankası A.Ş. (the “Bank”). This presentation is not directed at, or intended for distribution to or use by, any person or entity that is a citizen or resident of, or located in, any locality, state, country or other jurisdiction where s