Yapi Ve Kredi Bankasi A.s. · BIST:YKBNK
Yapi Ve Kredi Bankasi A.s — Yapı Kredi — Q1 2019 Earnings Presentation
35 slides from Yapi Ve Kredi Bankasi A.s's earnings presentation, 2019
Slide 1: Yapı Kredi 1Q19 Investor Presentation
Yapı Kredi 1Q19 Investor Presentation
Slide 2: Yapı Kredi: A leading financial services group
Yapı Kredi: A leading financial services group Yapı Kredi Overview Key Figures – 1Q19 Market Share – 1Q19 Ratings Moody’s: B2 / Fitch: BB- / S&P: B+ Market Share5 Cash & Non-cash Loans 9.8% Total Assets Loans1 Total Bank 393.4 230.5 Customer Deposits 10.2% bln TL bln TL Corporate Loans6 8.8% Net Inc
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 shareholders supporting Yapı Kredi’s growth
Stable, long-term focused majority shareholders supporting Yapı Kredi’s growth Shareholding Structure 50% KOÇ FINANCIAL SERVICES 50% 81.9%1 Simple, successful, pan- Largest business group in European, commercial bank Turkey with combined revenue with a unique Western, equal to 8% of Turkey’s GDP Cen
Slide 5: A strong start to the year, characterized by strong core performance along with prudent asset quality approach
A strong start to the year, characterized by strong core performance along with prudent asset quality approach Summary Net Profit (TL mln) RoTE Quarterly Yearly Quarterly Cumulative Stable +193bps -88bps +15% 1,241 1,244 1,241 14.2% 13.3% 13.3% 1,081 11.4% 4Q18 1Q19 1Q18 1Q19 4Q18 1Q19 2018 1Q19 CoR
Slide 6: Further improvement in liquidity, higher than committed capital buffers despite the market volatility
Further improvement in liquidity, higher than committed capital buffers despite the market volatility Summary Liquidity 2 LDR1 LCR TL LDR 163% 129% 134% FC LCR 245% 226% 382% 114% 152% 104% 103% 136% 120% Short term FX TL Duration Gap Liquidity: ~11 bln USD (months) 2.9 2.3 2.3 2019 run-off’s: 4.0 b
Slide 7: Loans: growth driven by TL originations in 1Q19
Loans: growth driven by TL originations in 1Q19 Lending Loan volumes (TL bln) Yapı Kredi Private Banks1 5% total loan growth on a ytd basis 1Q19 y/y ytd y/y ytd supported by 6.9 bln TL CGF utilization in 1Q19 Cash+Non-cash Loans2 322.4 12% 5% 6% 3% 3 TL 152.3 4% 4% -2% 2% FC ($) 3 30.2 -16% 0% -18%
Slide 8: Deposits: quarter marked by dollarization, ongoing market share gain in local currency
Deposits: quarter marked by dollarization, ongoing market share gain in local currency small ticket and demand deposits Funding Deposit volumes (TL bln) Deposit Breakdown (FX adjusted)2 1 YKB Private Banks 1Q19 y/y ytd y/y ytd Corporate & Customer Deposits 215.4 29% 8% 19% 6% 31% Commercial 32% Time
Slide 9: Strong revenue generation thanks to wider core spread and fee growth
Strong revenue generation thanks to wider core spread and fee growth Revenues Revenues1;2 (TL mln) Core Revenue Margin3 Quarterly2;3 Cumulative +32% +9% +41bps -55bps 4,906 4,518 5.4% 4.8% 4.8% 3,724 4.4% 4,449 4,145 Core2 3,577 4Q18 1Q19 2018 1Q19 373 456 Other1 147 1Q18 4Q18 1Q19 21 bps ytd improv
Slide 10: Widening NIM thanks to strong recovery in core spreads
Widening NIM thanks to strong recovery in core spreads Revenues - NIM Swap Adjusted NIM Quarterly Cumulative +15bps -75bps CPI for 1Q19 valuation: 12% +14bps (2018: 25.2%) 4.0% 3.2% 1 3.3% 3.3% 3.1% 1Q18 4Q18 1Q19 2018 1Q19 Quarterly NIM up 81bps, on a homogeneous basis +20 bps higher NIM adjusted f
Slide 11: A normalisation in loan-deposit spreads in 1Q19
A normalisation in loan-deposit spreads in 1Q19 with ease in deposit costs and ongoing loan repricing Loan-Deposit Spread Loan – Deposit Spread Evolution 1 Loan Yields Deposit Costs Loan-Deposit Spread (Quarterly) (Quarterly) (Quarterly) 210bps increase in total loan Sharp decline in total cost of y
Slide 12: Strong fee growth driven by both transactional banking and payment systems
Strong fee growth driven by both transactional banking and payment systems Revenues - Fees Net Fee Income (TL mln) Fees Received Composition Bancassurance Asset Mngmt Other 6% 1% 2% +29% Money Transfer 8% +20% 1,337 Payment Systems 1,116 53% 1,034 Lending Related 30% • Payment systems: +51% y/y (-4%
Slide 13: Cost growth below inflation, thanks to continuous efficiency actions and cost discipline
Cost growth below inflation, thanks to continuous efficiency actions and cost discipline Costs Costs1 (TL mln) Cost1 / Income2 (TL mln) Quarterly3 Cumulative +18% -3% -4.8 pp 1,768 1,712 1,450 39.7% +69 bps 34.9% 34.2% 34.9% 1Q18 4Q18 1Q19 4Q18 1Q19 2018 1Q19 Notes: 1. Excluding pension fund provisi
Slide 14: Digital transformation: ongoing focus with increase in customer base
Digital transformation: ongoing focus with increase in customer base Number of Digital Customers (mln) +0.2 mln +1.1 mln 7.00 70% 64% 6.00 61% 60% 5.00 51% 50% Penetration 4.00 40% 40% Transaction3 per channel 3.00 30% 5.44 5.68 2.00 4.35 20% 3.30 1.00 10% +10% y/y 0.00 0% 2016 2017 2018 1Q19 -10% 8
Slide 15: Ongoing prudent approach on asset quality… CoR improves
Ongoing prudent approach on asset quality… CoR improves thanks to strong collections and up-fronted provisions in 2018 Asset Quality Total Cost of Risk1 Quarterly Cumulative -229bps 2 -37bps 4.48% 2 2 2.19% 2.56% 2 2.19% 4Q18 1Q19 2018 1Q19 3.31% 1.88% Specific CoR 1.88% 1.88% Specific CoR Cost of R
Slide 16: Further increase in total coverage with continued efforts on Stage 2
Further increase in total coverage with continued efforts on Stage 2; Stage 3 coverage maintained Asset Quality Provisions / Gross Loans 110% 109% 108% 107% 106% 0.7% 0.6% Highest coverage 105% 104% 103% 102% 101% among peers 0% 100% 99% 98% 97% 96% 95% 94% 93% 93% 92% -2% 91% 90% 89% Stage I 88% 87
Slide 17: Ongoing conservatism in energy and real estate portfolios
Ongoing conservatism in energy and real estate portfolios Asset Quality Energy Loans1 details Stage II Loans Breakdown by sub-segments Coverage 11.2% 13.0% (1.2x of total loans) Risk Scale Stage II ratio Stage II Coverage 42.4% (2.8x of total loans) Renewable 53% 36% 10.0% (2.3x of total loans) (0.9
Slide 18: Market volatility and operational risk adjustment resulted in slight contraction in CET1
Market volatility and operational risk adjustment resulted in slight contraction in CET1 while internal capital generation sustains Capital Capital Ratios CET1 Tier1 +19bps +73bps CAR -42bps 14.8% 15.0% 12.1% 13.4% 11.4% 11.4% 10.0% 11.0% 9.9% 12.0% 1 9.6% 1 8.1% 2017 2018 1Q19 2017 2018 1Q19 2017 2
Slide 19: Maintaining 2019 guidance
Maintaining 2019 guidance Guidance 2019 1Q19 1 Guidance 1 Realization LDR ~105% 103% Fundamentals CAR > 15% 15% TL Loans ~15% 12% 2 Volumes Deposits Mid-teens 20% NIM Flat +20 bps (w/o CPI impact) Revenues Fees Mid-teens 30% Costs Costs Below average CPI 17% NPL ratio < 7% 5.5% Asset Quality Total C
Slide 20: Annex
@PYaniKredi
Slide 21: Macro Environment and Banking Sector
Macro Environment and Banking Sector Macro Environment Banking Sector CBRT maintains the tight stance to sustain the Loan growth improves with the support of CGF ongoing inflation improvement utilisations in 1Q19 2017 2018 1Q19 2017 2018 1Q19 GDP Growth (y/y) 7.4% 2.6% - Loan Growth (y/y) 21% 14% 15
Slide 22: Consolidated Balance Sheet
Consolidated Balance Sheet TL bln 1Q17 1H17 9M17 2017 1Q18 1H18 9M18 2018 1Q19 q/q y/y Assets Total Assets 278.3 283.3 290.6 316.9 328.7 365.1 422.0 373.4 393.4 5% 20% Other 4 Loans 2 183.7 185.8 190.6 199.9 205.3 222.2 249.4 220.5 230.5 4% 12% Assets 3% TL Loans 107.0 111.1 115.1 120.1 118.8 123.0
Slide 23: Consolidated Income Statement
Consolidated Income Statement TL million 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 q/q y/y Net Interest Income including swap costs 2,217 2,089 2,154 2,522 2,543 2,778 4,004 4,239 3,112 -27% 22% o/w NII 2,251 2,321 2,353 2,810 2,845 3,209 4,311 4,131 3,485 -16% 22% o/w CPI-linkers 325 338 409 663
Slide 24: Bank-Only Income Statement
Bank-Only Income Statement TL million 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 q/q y/y Net Interest Income including swap costs 2,030 1,895 1,965 2,306 2,270 2,585 3,677 3,925 2,806 -29% 24% o/w NII 2,141 2,174 2,212 2,684 2,768 3,108 4,143 3,923 3,356 -14% 21% o/w CPI-linkers 325 338 409 663 43
Slide 25: NIM Evolution
NIM Evolution Quarterly +82bps +115bps 1 -68bps 67bps 4.57% 2 141bps -208bps -2bps 3.30% -46bps 4Q18 Loan Yield Deposit Cost Swap Costs CPI linkers Securities Other 1Q19 financial instruments Cumulative +138bps -68bps -19bps 4.05% +17bps -75bps 3.30% -67bps 2018 Loan Yield Deposit Cost Swap Costs CP
Slide 26: Securities
Securities 1 Securities/Assets Composition by Type Composition by Classification1 TL Securities (bln TL) FC Securities (bln USD) 1.0% 0.5% 0.7% 37.2 2.5 2.4 2.4 35.8 41% 46% 47% 13.4% 30.5 12.7% 13.2% 34% 35% 41% 97% 97% 97% 58% 54% 53% 59% 58% 50% 9% 7% 7% 1Q18 2018 1Q19 FV FV through Other 1Q18 20
Slide 27: International
Details of main Borrowings ~ US$ 2.1 bln Syndications Oct’18: US$ 275mln & € 690.7mln, all-in cost at Libor+ 2.75% and Euribor+ 2.65% for 367 days. 27 banks from 13 countries 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 countrie
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 2017 EU 2017 Population (mln) 81 513 Europe’s 7th largest economy and a member of Median Age 32 43 1 G20 Population Growth Turkey 1.5% 0.3% (CAGR 2000-2017) Young, dynamic, large and growing popu
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 Total Loans1/GDP Corporate Loans/GDP Million Inhabitants (2017) 47% 153% 45% 353 127% 44% 126% 38% 101% 34% 131 62% 58% 18% 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 Well regulated (BRSA est. in 2001) Banking Sector Banking Sector Best practices in technology: payment systems 2013 2014 2015 2016 2017 9M18 2018 1Q19 and well-qualified workforce Banks # 49 5
Slide 31: CBRT rates
CBRT rates CBRT upper band 26.6% 24.8% 25.50% 24.00% 22.50% 19.25% 21.1% 18.2% 16.1% 19.25% 12.93% 16.25% 10.9% 11.4% 11.94% 10.0% 9.4% 12.75% 8.8% 10.31% 11.94% 9.25% 8.81% CBRT lower band 8.90% 7.77% 7.25% Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17 F
Slide 32: Credit Ratings
Credit Ratings Long-Term Foreign Currency Long-Term Local Currency Rating Outlook Rating Outlook Yapı Kredi B2 Negative B1 Negative Garanti B2 Negative B1 Negative Akbank B2 Negative B1 Negative Işbank B2 Negative B2 Negative Halkbank B2 Negative B2 Negative Vakıfbank B2 Negative B1 Negative Yapı Kr
Slide 33: Consolidated regulatory capital requirements for Yapı Kredi
Consolidated regulatory capital requirements for Yapı Kredi Phase-in of Consolidated Capital Requirements for Yapı Kredi CET1 AT1 T2 CCB SIFI CCyB 12.03% 11.03% 0.034% 10.02% 0.025% 1.5% Countercyclical Buffer 0.017% 1.125% SIFI Buffer 0.75% 1.875% 2.5% Capital Conservation Buffer 1.25% Tier 2 2.0%
Slide 34: 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 35: 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