Yapi Ve Kredi Bankasi A.s. · BIST:YKBNK
Yapi Ve Kredi Bankasi A.s — Yapı Kredi — Investor Presentation (2020)
36 slides from Yapi Ve Kredi Bankasi A.s's investor presentation, 2020
Slide 1: Yapı Kredi 2019 Investor Presentation
Yapı Kredi 2019 Investor Presentation
Slide 2: Yapı Kredi: A leading financial services group
Yapı Kredi: A leading financial services group Yapı Kredi Overview Key Figures – 2019 Market Share – 2019 Ratings Moody’s: B3 / Fitch: B+ Market Share6 Cash & Non-cash Loans 9.4% Total Assets Loans1 Total Bank 411.2 229.4 Customer Deposits 9.2% bln TL bln TL Corporate Loans7 8.3% 2 Net Income RoATE2
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 Shareholding Structure Free Float 100% 9% 20% 30% KOÇ FINANCIAL SERVICES 40.97% Largest business group in Turkey with combined revenue equal to 8% of Turkey’s GDP Koç Holding 2019 Total Assets (EUR bln) 22.6 Revenues (EU
Slide 5: A transition year with strong core revenue generation, volume growth in real terms
A transition year with strong core revenue generation, volume growth in real terms, with acceleration in provisions for healthier B/S 1 1 Net Profit at 3.7 bln with RoTE at 9.8% , supported by the strong PPP performance +26 bps y/y NIM widening (excl. CPI impact) +28%2 y/y fee increase Below a
Slide 6: Stable PPP with strong core revenue generation while net profit affected by elevated provisioning
Stable PPP with strong core revenue generation while net profit affected by elevated provisioning, where the solid fundamentals intact Profit Before Tax generation (TL mln) +28% y/y -24% y/y 1 +21% y/y 1,175 -1,735 -23% y/y 1 -905 +15% y/y 2,330 6,048 -952 +26% y/y -23% y/y 2 -61% y/y 4,674 3 -1,544
Slide 7: TL loan growth in real terms via small tickets with ongoing deleveraging in FC loans
TL loan growth in real terms via small tickets with ongoing deleveraging in FC loans Lending Loan volumes (TL bln) Yapı Kredi Private Banks1 2019 q/q y/y q/q y/y 4% total loan growth on a y/y basis Cash+Non-cash Loans2 318.9 3% 4% 5% 4% TL3 159.5 4% 11% 5% 7% 3 13% y/y increase in TL cash loans FC (
Slide 8: Strong demand deposit growth with ongoing support from small tickets
Strong demand deposit growth with ongoing support from small tickets supporting cost of funding Funding Deposit volumes (TL bln) Deposit Breakdown (FX adjusted)2 1 YKB Private Banks Corporate & 2019 q/q y/y q/q y/y 23% Commercial 28% 35% Time Deposits Customer Deposits 226.0 5% 13% 7% 18% TL 99.5 10
Slide 9: Continuous core revenue improvement with acceleration in the last quarter
Continuous core revenue improvement with acceleration in the last quarter, thanks to better positioning against macro developments Revenues Revenues1;2 (TL mln) Core Revenue Margin Yearly Cumulative +5% -49bps 18,863 19,728 5.3% 4.8% 3 52 bps ytd improvement 18,465 excluding CPI linkers Core2 17,800
Slide 10: Widening in CPI adjusted NIM better than the guidance
1 Widening in CPI adjusted NIM better than the guidance with support from L/D spreads Revenues - NIM Swap Adjusted NIM NIM Evolution Cumulative -70bps Core NIM: +56 bps +90bps +9bps +39bps 4.1% 4.10% -43bps 3.4% -96bps 3.40% -69bps 1 +26 bps higher NIM excluding CPI linkers 2018 Loan Yield Deposit S
Slide 11: Further widening in loan-deposit spread in a decreasing interest rate environment
Further widening in loan-deposit spread through successful strategy in a decreasing interest rate environment Loan-Deposit Spread Loan – Deposit Spread Evolution 1 Loan-Deposit Spread Deposit Costs Loan Yields (Quarterly) (Quarterly) (Quarterly) 98 bps wider Loan-Deposit spread Controlled decrease o
Slide 12: Fee performance significantly better than guidance
Fee performance significantly better than guidance supported by renewed service model, payment systems and transactional banking Revenues - Fees Net Fee Income1 (TL mln) Net Fees Composition1;2 Yearly 28% Reported: Bancassurance Asset Mngmt Other +31% y/y 8.6% 2.2% 1.1% 5,412 Payment Systems Money T
Slide 13: Cost growth in line with guidance thanks to single digit increase in running costs
Cost growth in line with guidance thanks to single digit increase in running costs Costs Costs1 (TL mln) Share of Digital in Main Products4 Sold +5.6pp Yearly +14.8% vs 15.2% avg. inflation 36% 7,407 6,454 31% 26% 20% Cost/Income2 34.2% 37.5% 2018 2019 2016 2017 2018 2019 Cost Breakdown 5 Transactio
Slide 14: CoR level elevated due to acceleration of provisioning
CoR level elevated due to acceleration of provisioning which were planned for coming years Asset Quality Total Cost of Risk1 Cumulative Quarterly +23bps +147bps 2 4.46% 2 2 3.12% 2.99% 2 2.89% 2 2.35% 2 2.58% 2018 2019 1Q19 2Q19 3Q19 4Q19 Cost of Risk composition Cumulative Quarterly 325bps 17bps 32
Slide 15: Risky file classification with further actions to strengthen the coverage
Risky file classification with further actions to strengthen the coverage Asset Quality Provisions / Gross Loans 0.7% 0.8% 0.6% Highest coverage 110% 109% 108% 107% 106% 105% among peers1 104% 103% 102% 101% 0% 100% 99% 98% 97% 96% 95% 94% 93% 92% 91% -2% 90% 89% 88% 80% Stage I 87% 86% 85% 84% 83%
Slide 16: Significant improvement in capital ratios driven by strong internal capital generation
Significant improvement in capital ratios driven by strong internal capital generation Capital Capital Ratios CET1 Tier1 CAR +192bps +227bps +109bps 16.7% 14.8% 13.7% 13.4% 12.5% 11.4% 11.4% 10.0% 9.9% 12.0% 2017 2018 2019 2017 2018 2019 2017 2018 2019 +152bps 13.7% +160bps 16.7% +155bps 12.5% +113b
Slide 17: Stronger top-line and fundamental performance… Efforts towards balance sheet cleaning
Stronger top-line and fundamental performance… Efforts towards balance sheet cleaning Guidance 2019 Guidance vs. Realizations 2019 2019 Guidance Actual LDR ~105% 98% Fundamentals CAR > 15% 16.7% TL Loans ~15% 14% Volumes Deposits Mid-teens 13% NIM Flat +26 bps (w/o CPI impact) Revenues Fees Mid-teen
Slide 18: Sustaining healthy fundamentals… Profitability improvement with contribution of all P/L lines
Sustaining healthy fundamentals… Profitability improvement with contribution of all P/L lines 2020 Guidance 2020 Guidance Drivers Guidance LDR ≤ 105% Sustaining ample liquidity levels Fundamentals Capital ratios to be supported by ongoing efforts via internal CAR ≥ 16% capital generation Volum
Slide 19: Annex
@PYaniKredi
Slide 20: Macro Environment and Banking Sector
Macro Environment and Banking Sector Macro Environment Banking Sector Normalization trend on all macro lines Strong fundamentals of the sector with favourable global environment allowing along with subdued loan growth due to ongoing the CBT to ease interest rates market volatility 2017 2018 2019 201
Slide 21: CMD vs Actual Macro Environment and Banking Sector
CMD vs Actual Macro Environment and Banking Sector Macro Environment Banking Sector 2019 was a year of correction rather than a growth Sector improvement in net profit postponed with the year as was expected during CMD change in macro indicators mainly in 2019 2019 2019 2020 2020 2019 2020 2020 CMD
Slide 22: CMD Guidance vs 2020 Expectations - 1
CMD Guidance vs 2020 Expectations - 1 2020 2020 CMD Guidance Expectations Comparison CET 1 Ratio ≥ 11.5% ≥ 12% Capital Position Tier 1 Ratio ≥ 12% ≥ 13% (consolidated) CAR ≥ 14% ≥ 16% Revenue Margin ≥ 4.7% ≥ 5.0% Loan Growth - CAGR 17-20 ~13 - 15% ~10% Company Loans/Total Loans ~55% ~55% SME Loans/T
Slide 23: CMD Guidance vs 2020 Expectations - 2
CMD Guidance vs 2020 Expectations - 2 2020 2020 CMD Guidance Expectations Comparison Cost / Income ≤ 36% ~37% IT Investments/Total Costs ≥ 7% ≥ 7% IT Expenses/Total Costs ≥ 11% ≥ 11% IT Investments&Expenses ('17-20 CAGR) 17-19% ~20% Cost Management # of Digital Customers ('17-20 CAGR) ~18-20% ~17-18
Slide 24: Consolidated Balance Sheet
Consolidated Balance Sheet Assets TL bln 1Q17 1 1H17 1 9M17 1 20171 1Q18 1H18 9M18 2018 1Q19 1H19 9M19 2019 q/q y/y Other Assets4 2% Total Assets 278.3 283.3 290.6 316.9 328.7 365.1 422.0 373.4 393.4 409.0 396.9 411.2 4% 10% 3 Loans2 183.7 185.8 190.6 199.9 205.3 222.2 249.4 220.5 230.5 232.3 222.4
Slide 25: Consolidated Income Statement
Consolidated Income Statement TL million 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 q/q y/y 2018 2019 y/y Net Interest Income including swap costs 2,543 2,778 4,004 4,239 3,112 3,241 3,254 3,329 2% -21% 13,564 12,936 -5% o/w NII 2,845 3,209 4,311 4,131 3,485 4,041 4,079 3,926 -4% -5% 14,496 15,531 7% o
Slide 26: Bank-Only Income Statement
Bank-Only Income Statement TL million 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 q/q y/y 2018 2019 y/y Net Interest Income including swap costs 2,270 2,585 3,677 3,925 2,806 2,936 2,973 3,046 2% -22% 12,458 11,761 -6% o/w NII 2,768 3,108 4,143 3,923 3,356 3,869 3,827 3,723 -3% -5% 13,942 14,776 6% o/w
Slide 27: Loan Details in terms of Staging and Coverage
Loan Details in terms of Staging and Coverage Total Loans Stages Coverage Stage 3 7.6% 62.5% 15.1% 13% Stage 2 Stage 1 77.3% 0.6% Total Coverage 7.2% Energy Real Estate Infrastructure & Construction Stages Coverage Stages Coverage Stages Coverage 9.2% 58% 6.1% 35% 8.3% 75% 12.4% 9% Risky Files 35.8%
Slide 28: Securities
Securities 1 Securities/Assets Composition by Type Composition by Classification1 TL Securities (bln TL) FC Securities (bln USD) 0.3% 0.5% 1.0% 74% of total 26% of total 40.9 37% 13.4% 13.9% 2.5 46% 52% 35.8 2.4 2.5 12.2% 30% 28.0 34% 40% 97% 97% 98% 63% 54% 47% 65% 59% 51% 9% 7% 5% 2017 2018 2019 2
Slide 29: External FC funding structure
External FC funding structure Long Term Funding (USD bln) Tier I & II 2.9 Senior Bonds 2.0 Securitizations & Supranational Funding 2.6 Syndications 0.0 Other 0.8 Long Term Total 8.4 (Over 1 year) 8.4 USD bln Short Term 4.9 (1 year) USD Short Term Funding (USD bln) bln Tier I & II 0.0 Senior Bonds 0.
Slide 30: International
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 31: Despite solid growth, 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 32: 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 1Q17 1H17 9M17 2017 9M18 2018 1Q19 1H19 9M19 2019 Ba
Slide 33: 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% 15.50% 12.93% 16.25% 15.6% 13.86% 10.9% 10.0% 11.4% 11.94% 9.4% 12.75% 12.2%12.50% 8.8% 10.31% 11.94% 9.25% 8.81% CBRT lower band 8.90% 7.77% 7.25% Mar-17 Mar-16 Mar-18 Mar-19 Jan-17 Jan-
Slide 34: 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 35: 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 36: 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