Yapi Ve Kredi Bankasi A.s. · BIST:YKBNK
Yapi Ve Kredi Bankasi A.s — Yapı Kredi — H1 2019 Earnings Presentation
34 slides from Yapi Ve Kredi Bankasi A.s's earnings presentation, 2019
Slide 1: Yapı Kredi 1H19 Investor Presentation
Yapı Kredi 1H19 Investor Presentation
Slide 2: Yapı Kredi: A leading financial services group
Yapı Kredi: A leading financial services group Yapı Kredi Overview Key Figures – 1H19 Market Share – 1H19 Ratings Moody’s: B3 / Fitch: B+ / S&P: B+ Market Share5 Cash & Non-cash Loans 9.8% Total Assets Loans1 Total Bank 409.0 232.3 Customer Deposits 10.1% bln TL bln TL Corporate Loans6 8.8% Net Inco
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: Ongoing strength in core performance with a prudent asset quality approach
Ongoing strength in core performance with a prudent asset quality approach, in a quarter shaded with macro volatility Net Profit (TL mln) +8% RoTE at 12.5%; better than the guidance -4% 4 2,471 2,361 NIM quarterly up by 13 bps thanks to TL loan deposit 2,196 spread (+20bps q/q) 2Q19 1,120 Fee income
Slide 6: Loans: Strong TL loan growth vs ongoing decline in FC loans
Loans: Strong TL loan growth vs ongoing decline in FC loans with further improvement in composition towards small tickets Lending Loan volumes (TL bln) Yapı Kredi Private Banks1 1H19 q/q y/y ytd q/q y/y ytd 5% total loan growth on a ytd basis Cash+Non-cash Loans2 323.1 0% 3% 5% -1% -1% 2% 3 TL 158.5
Slide 7: Deposits: Strong TL deposit growth with market share gain in individual deposits
Deposits: Strong TL deposit growth with ongoing market share gain in individual deposits Funding Deposit volumes (TL bln) Deposit Breakdown (FX adjusted)2 1 YKB Private Banks Corporate & 1H19 q/q y/y ytd q/q y/y ytd 28% Commercial 32% Customer Deposits 219.5 2% 22% 10% 2% 14% 8% Time Deposits TL 90.
Slide 8: Core revenues continue to improve; contraction in trading income
Core revenues continue to improve; contraction in trading income due to macro volatility Revenues Revenues1;2 (TL mln) Core Revenue Margin Quarterly +14% Quarterly2;3 -2% -16bps 4,848 4,741 4,144 Stable quarterly 4.8% 4.6% Core Revenue Margin 4,556 4,392 when adjusted for CPI linkers Core2 3,829 (2Q
Slide 9: CPI adjusted NIM improves 13bps q/q and 16bps ytd
CPI adjusted NIM improves 13bps q/q and 16bps ytd with positive evolution in TL core spreads Revenues - NIM Swap Adjusted NIM NIM Evolution Quarterly -8bps Quarterly NIM up 3.4% 3.3% 3.3% 3.30% +23bps +46bps 3.29% +13bps, on a homogeneous -15bps -41bps -13bps basis when adjusted for CPI (2Q19: 11% -
Slide 10: Positive TL loan-deposit spread on back of ease in TL deposit costs
Positive TL loan-deposit spread on back of the ease in TL deposit costs resulting in q/q core spread improvement Loan-Deposit Spread Loan – Deposit Spread Evolution 1 Loan Yields Deposit Costs Loan-Deposit Spread (Quarterly) (Quarterly) (Quarterly) 44bps decline in total cost of 19bps decline in TL
Slide 11: Strong yearly fee growth sustained through payment systems and transactional banking
Strong yearly fee growth sustained through payment systems and transactional banking; q/q decline due to slowdown in lending Revenues - Fees Net Fee Income (TL mln) Fees Received Composition Quarterly +20% -6% Bancassurance Asset Mngmt Other 5% 1% 2% 1,337 Money Transfer 1,258 8% 1,051 +51% y/y +50%
Slide 12: Controlled cost growth below average inflation with further efficiency focus
Controlled cost growth below average inflation with further efficiency focus Costs Costs (TL mln) Cost1 / Income2 (TL mln) Quarterly +15% Cumulative +5% 1,793 1,712 1,554 -1.6 pp +2.3 pp 38.2% 36.6% 34.2% 2Q18 1Q19 2Q19 Yearly +17% vs 20% avg. inflation 3,505 3,003 1H18 2018 1H19 1H18 1H19 Notes: 1.
Slide 13: Sustainable growth in digital customers with increasing trend in digital transactions
Sustainable growth in digital customers with increasing trend in digital transactions Number of Digital Customers (mln) +1.1 mln +0.4 mln 7.00 70% 65% 6.00 61% 60% 5.00 51% 50% Penetration Transaction3 per channel 4.00 40% 40% 3.00 5.44 5.79 30% +9% y/y 2.00 4.35 20% 3.30 1.00 10% 0.00 0% -11% 8% Br
Slide 14: Slight pick up in q/q CoR driven by NPL inflows; CoR improves over 2018
Slight pick up in q/q CoR driven by NPL inflows through a couple of big tickets… CoR improves over 2018 Asset Quality Total Cost of Risk1 Quarterly Cumulative +23bps -23bps 2 2 2 2.42% 2.56% 2.19% 2.33% 2 1Q19 2Q19 2018 1H19 Specific CoR 1.88% 2.55% Specific CoR 1.88% 2.24% Cost of Risk composition
Slide 15: High total coverage level maintained
High total coverage level maintained, Stage 3 coverage came down q/q due to fully covered NPL sales of 1.7 bln TL in the quarter Asset Quality Provisions / Gross Loans 110% 109% 108% 107% 0.7% 0.6% 0.7% Highest coverage 106% 105% 104% 103% among peers 102% 0% 101% 100% 99% 98% 97% 96% 95% 94% 93% 93
Slide 16: Focus on energy and real estate portfolios sustain
Focus on energy and real estate portfolios sustain Asset Quality Energy Loans1 details Stage II Loans Breakdown by sub-segments Coverage 10.9% 13.1% (1.2x of total loans) Risk Scale Stage II ratio Stage II Coverage 45.0% (3.0x of total loans) Renewable 51% 38% 11.3% (2.5x of total loans) (1.0x of to
Slide 17: Improvement in capital ratios thanks to internal capital generation and RWA optimisation
Improvement in capital ratios thanks to succesful efforts towards internal capital generation and RWA optimisation Capital Capital Ratios 500 mln TL Tier 2 CET1 Tier1 CAR +83bps issued in July will +23bps +138bps add 15bps 14.8% 15.6% 12.8% 13.4% 11.4% 11.6% 11.4% 1 12.0% 10.0% 9.9% 1 1 9.6% 8.1% 20
Slide 18: Maintaining 2019 guidance
Maintaining 2019 guidance Guidance 2019 1H19 1 Guidance 1 Realization LDR ~105% 101% Fundamentals CAR > 15% 16% TL Loans ~15% 15% 2 Volumes Deposits Mid-teens 19% NIM Flat +16 bps (w/o CPI impact) Revenues Fees Mid-teens 26% Costs Costs Below average CPI 16% NPL ratio < 7% 5.9% Asset Quality Total C
Slide 19: Q&A
Q&A
Slide 20: Annex
@PYaniKredi
Slide 21: Macro Environment and Banking Sector
Macro Environment and Banking Sector Macro Environment Banking Sector Normalisation trend on all macro lines, with ongoing Slowdown in lending growth due to market tight stance of the CBT and improvement in inflation volatility, support from CGF sustains 2017 2018 1Q19 1H19 2017 2018 1H19 GDP Growth
Slide 22: Consolidated Balance Sheet
Consolidated Balance Sheet TL bln 1Q171 1H171 9M171 20171 1Q18 1H18 9M18 2018 1Q19 1H19 q/q y/y ytd Assets Total Assets 278.3 283.3 290.6 316.9 328.7 365.1 422.0 373.4 393.4 409.0 4% 12% 10% Other Assets Loans2 183.7 185.8 190.6 199.9 205.3 222.2 249.4 220.5 230.5 232.3 1% 5% 5% 4 4% TL Loans 107.0
Slide 23: Consolidated Income Statement
Consolidated Income Statement TL million 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 q/q y/y 1H18 1H19 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 3,241 4% 17% 5,321 6,353 19% o/w NII 2,251 2,321 2,353 2,810 2,845 3,209 4,311 4,131 3,485 4
Slide 24: Bank-Only Income Statement
Bank-Only Income Statement TL million 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 q/q y/y 1H18 1H19 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 2,936 5% 14% 4,856 5,742 18% o/w NII 2,141 2,174 2,212 2,684 2,768 3,108 4,143 3,923 3,356 3,86
Slide 25: Securities
Securities 1 Securities/Assets Composition by Type Composition by Classification1 0.6% 0.5% 0.6% TL Securities (bln TL) FC Securities (bln USD) 72% of total 28% of total 2.5 2.4 2.5 45% 46% 50% 38.9 13.4% 13.3% 35.8 12.4% 32.6 34% 34% 35% 97% 97% 98% 54% 54% 49% 59% 60% 58% 7% 7% 6% 1H18 2018 1H19 F
Slide 26: International Borrowings
Details of main Borrowings ~ US$ 2.1 bln Syndications Oct’18: US$ 275mln & € 690.7mln, all-in cost at Libor+ 3.00% and Euribor+ 2.90% 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 27: 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 28: 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 29: 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 Best practices in technology: payment systems Banking Sector and well-qualified workforce 2013 2014 2015 2016 2017 9M18 2018 1Q19 1H19 Banks #
Slide 30: CBRT rates
CBRT rates CBRT upper band 26.6% 24.8% 25.50% 24.00% 22.50% 21.25% 19.25% 18.2% 19.59% 21.1% 16.1% 18.25% 19.25% 15.6% 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% Mar-16 Mar-19 Mar-17 Mar-18 Oct-16 May-16 Oct-17 May-18 Oct-18 Ma
Slide 31: Credit Ratings
Credit Ratings Long-Term Foreign Currency Long-Term Local Currency Rating Outlook Rating Outlook 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 B3 Negative B2 Negative Yapı Kr
Slide 32: 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 11.53% 11.03% 0.034% 10.02% 0.025% 1.0% Countercyclical Buffer 0.017% 1.125% SIFI Buffer 0.75% 1.875% 2.5% Capital Conservation Buffer 1.25% Tier 2 2.0%
Slide 33: 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 34: 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