Yapi Ve Kredi Bankasi A.s. · BIST:YKBNK
Yapi Ve Kredi Bankasi A.s — Yapı Kredi — Debt Investor Presentation (October 2012)
42 slides from Yapi Ve Kredi Bankasi A.s's debt investor presentation, October 2012
Slide 1: Yapı Kredi Fixed Income Presentation
Yapı Kredi Fixed Income Presentation October 2012
Slide 2: Agenda
Agenda Executive Summary Turkish Economy and Banking Sector Overview Business Highlights Financial Highlights Outlook Annex 2
Slide 3: Executive Summary
Executive Summary onment As the world’s 18th largest economy1 and a member of G20, Turkey is a dynamic country with a unique Operrating ability to cope with change. The country stands out with favourable demographics, solid / improving macroeconomic fundamentals, g growth p potential and low lever
Slide 4: Yapı Kredi Highlights
Yapı Kredi Highlights 1944 Deep-rooted private bank with a nationwide presence 59% Highest among peers due to customer-business focus. Lowest securities / assets (17%) founding year loans/assets 2006 Largest merger in the Turkish banking sector 55% Solid deposit base with high contribution of retail
Slide 5: Agenda
Agenda Executive Summary Turkish Economy and Banking Sector Overview Business Highlights Financial Highlights Outlook Annex 5
Slide 6: Turkish Economy: Young and dynamic with significant growth potential
Turkish Economy Young and dynamic with significant growth potential Turkey EU Population (m ln) 75 502 Avg. Age off Population 29 43 8th2 largest in Europe, Europe 18th2 largest in the World Population Growth1 1.4% 0.4% Favourable demographics (43% under 25 years vs 28% in EU) with a rapidly gro
Slide 7: Macroeconomic Environment
Macroeconomic Environment Soft-landing underway with ongoing economic growth and declining inflation also driving current account deficit improvement 4Q11 1Q12 2Q12 Drivers of GDP Growth GDP Growth (y/y) 11.9% GDP growth confirming soft-landing 15% 9.1% with gradual rebalancing between 8.4% 5.2% 3
Slide 8: Banking Sector: Underpenetrated with stability, profitability and high growth potential
Banking Sector Underpenetrated with stability, profitability and high growth potential Penetration data Significant long-term growth potential on the back of positive Loans / GDP Deposits and AUM / GDP demographics and underpenetrated market Corporate Loans / GDP AUM / GDP Highly resilient thank
Slide 9: Banking Sector: Acceleration in loan growth in 2Q
Banking Sector Acceleration in loan growth in 2Q incorporating seasonality in company loans. Net interest margin g on a continuous p positive trend Banking Sector Volumes and KPIs Nominal Growth Rates (bln TL) Loans +5% in 2Q (vs 2% in 1Q) driven by TL 2Q12 1Q12 2Q12 1H12 Deposits +3% in 2Q (vs
Slide 10: Agenda
Agenda Executive Summary Turkish Economy and Banking Sector Overview Business Highlights Financial Highlights Outlook Annex 10
Slide 11: Yapı Kredi: Fourth largest private bank in Turkey
Yapı Kredi Fourth largest private bank in Turkey with a large network, leading brand and leadership in key segments / products Financial Highlights Market Positioning Rank (BRSA in TL, 30 June 2012) 4th largest among Assets 10.0% 5 private banks Total Assets (bln) 124.2 Branches 9.2% 5 Total Loans (
Slide 12: Yapı Kredi and its Major Shareholders
Yapı Kredi and its Major Shareholders A very successful partnership model in the Turkish banking sector Koç Holding is one of the most deep-rooted companies in Turkey with solid Shareholding Structure Excellent Combination of positions in energy, automotive, consumer durables, finance and 81 thous
Slide 13: Divisionalised Organisational Structure
Divisionalised Organisational Structure Coherent and customer focused service model supported by product factories Revenues and Volumes by Business Unit4 L (1H12) Corporate / Retail Banking Private Banking Comm. Banking Retail (including 38% 29 branches individual, Individual 168 RMs SME 50% Cre
Slide 14: Strategy
Strategy Clear and unique strategic guidelines aimed at profitable / sustainable growth and customer satisfaction Yapı Kredi’s medium-term objective is to achieve above sector profitability performance on the back of improvement in commercial effectiveness and continuation of investments for growth
Slide 15: Recent History and Key Performance Indicators
Recent History and Key Performance Indicators Successful execution of strategy resulting in consistent delivery of strong results Merger and Integration Key Performance Indicators Legal merger of Yapı Kredi and Koçbank Merger of the two banks’ core subsidiaries operating in the same sectors Net
Slide 16: Risk Management
Risk Management Prudent risk management policies Market Risk Effective hedging of interest rate risk between medium and long term fixed Income statement and capital volatility mitigated rate TL loans (e.g. mortgages) and TL deposits (structurally short term) via through high portion of HTM (58%
Slide 17: Agenda
Agenda Executive Summary y Turkish Economy and Banking Sector Overview Business Highlights g g Financial Highlights Outlook Annex 17
Slide 18: Key Highlights (2Q12)
Key Highlights (2Q12) Operationally strong quarter driven by core revenues Focus on quality growth 1 2 Ongoing cost discipline supporting core revenues Above sector growth in profitable segments with hi t i ll lowest historically l t securities/assets iti / t Evolution impacted by seasonality in
Slide 19: Balance Sheet
Balance Sheet Acceleration in customer business coupled with further strengthening of funding base 2011 Summary Balance Sheet, 1Q 2Q Key Ratios 2Q12 TL bln 2011 2Q12 ytd Growth Growth Loans / Assets 59% Total Assets 117 5 117.5 124 2 124.2 -2% 8% 6% 59% 18% Loans 69.3 72.9 0% 5% 5% Securities / Asse
Slide 20: Asset Composition
Asset Composition High share of lending in balance sheet reflecting customer business focus Total Assets Loans By Product By Currency (TL bln) Credit Cards TL 124.2 bln 15% 16% A t Auto Construc.Transport./ 2% 2% 10% Comm. General Purpose 8% 69.5 +5% 72.9 9% Finan. 8% Wholesale/ Mortgage 9% Institut
Slide 21: Liability Composition / Deposits
Liability Composition / Deposits Healthy deposit base Total Liabilities and Shareholders’ Equity Deposit Composition TL 124.2 bln ytd By Currency Composition of Demand Deposits4 (2Q12) Demand 17% 6% Deposits: Borrowings1 47% 44% TL 10.6 bln Priv. OtherCorp. 7% 3% 7% FC Share of Share of Retail2:46%
Slide 22: Liability Composition / Borrowings
Liability Composition / Borrowings Ongoing diversification of wholesale funding Total Liabilities and Borrowings Composition Shareholders’ Equity 5% ~ €480 mln Supranationals/Multilaterals: Supranationals 8% EIB Loan - Jul 08-May12: €395 mln, 5-15 years TL 124.2 bln ytd IBRD (World Bank) Loan -
Slide 23: Liability Composition / Capital
Liability Composition / Capital Capital base supporting business growth Total Liabilities Capital Evolution (TL bln) Capital Adequacy Ratio and Tier 1 Ratio TL 124.2 bln ytd 2007-2Q12 CAGR Tier 1 22% Tier 2 13% 17% 6% 4.0 14.9% Borrowings1 4.0 14.4% 3.0 12.8% CAR Repo 6% 18% 3.0 11.3% 11 3% 11.1% 11
Slide 24: Asset Quality
Asset Quality Capability to effectively manage asset quality in changing market conditions NPL Ratio Cost of Risk1 (net of collections) NPL YKB 5.3% 3.4% 3.2% 3.3% Ratio excl. Sector2 4.1% 3.3% 2.7% 3.4% sales: Sector: 2.6% 0.95%3 0.59%3 1.37% 1.21% 3.4% 3.0% 3.2% 3.3% Total Cost 0.81% 0.49%3 of Ris
Slide 25: Asset Quality: Evolution consistent with soft-landing
Asset Quality Evolution consistent with soft-landing 3 NPL Ratio by Segment NPL by Sector (2Q12) 12.6% NPL Composition of NPL Ratio Share in Performing Company Loans Loans 10.0% Ship Building 43.2% 1% 7.7% Transport./ Transport/Comm. 3.4% 8% Comm. 6.8% Textile 9% 9% Ship 6.3% Building Textile 3.5% 7
Slide 26: Key Performance Indicators
Key Performance Indicators First half 2012 trends Net Income (mln TL) Return on Average Equity1 1 101 1,101 1 066 1,066 3 20.6% Tangible: 3 17.0% 18.4% 838 Tangible: +2% 13.1% 13.2% 14.3% 414 424 13.2% 1Q12 2Q12 1H11 1H12 1Q12 2Q12 1H11 1H12 Return on Assets2 Cost / Income 48.9% 49.4% 48.4% 43.5% 2.
Slide 27: Income Statement
Income Statement Net income performance driven by solid NIM expansion despite regulatory changes and increasing general provisions y/y TL mln 2011 y/y 1H12 y/y excl. reg. 2011 impacts5 1 Revenues stable driven by disciplined Total Revenues 6,648 0% 3,244 1% 5% g NIM management and sound fee growth
Slide 28: Revenues
Revenues Sustained revenue base driven by positive core revenue performance Revenue Composition Fees and Commissions1 (TL mln) Composition Fees / Operating Costs Core Insurance 66% 2,640 3,056 62% 3 Revenues 3% Other 2 11% Asset 3,218 3,244 Management 2% 6% Other 18% Lending Credit (Dividend, Relate
Slide 29: Costs
Costs Controlled cost management with unique track record in cost discipline Annual Cost Growth Cost Composition (TL mln) Y/Y 1,399 1,586 13% Successful execution of Other1 5% 6% 50% growth strategy driven by branch expansion 19% Sector accompanied by effective 15% 46% 44% 8% 14% HR headcount mana
Slide 30: Commercial Effectiveness
Commercial Effectiveness Improvement trend continuing Key Productivity Indicators Synergies with Insurance Subs 1Q11 2Q11 3Q11 2011 1Q12 2Q12 Retail Cross Sell Ratio New Products Sales (ths) 1Q12 2Q12 Δ Loans / Employee (ths TL) 4,727 4.18 4 13 4.13 Private Pension 88 8.8 18 8 18.8 113% 4,502 5% 4,2
Slide 31: Agenda
Agenda Executive Summary Turkish Economy and Banking Sector Overview Business Highlights Financial Highlights Outlook Annex 31
Slide 32: Outlook for the remainder of 2012
Outlook for the remainder of 2012 Soft-landing scenario intact Guidance for 2012 (as of Sep’12) GDP Growth Pick up expected in 2H12 via improving domestic demand 4.2% Macrro Inflation Base effect to lead to drop in 4Q12. Core inflation to decline steadily 6.3%1 CAD / GDP Sustained improvement trend
Slide 33: Areas of Focus
Areas of Focus Continued focus on long-term strategic pillars with ongoing initiatives Long Term Strategic Pillars Key Ongoing Initiatives Selective and quality loan growth Utilisation of enhanced SME service model Growth & Focus on customer Transformation of IT system to optimise Commercial
Slide 34: Yapı Kredi: A strong franchise with unique competitive advantages
Yapı Kredi A strong franchise with unique competitive advantages Healthy, Robust and Customer Business Focused Balance Sheet Strong Liquidity and Funding Position Proven Capability of Cost Control and Efficiency Improvements Solid Risk Profile F Focus on Value V l Generating G ti Segments S t with i
Slide 35: Agenda
Agenda Executive Summary Turkish Economy and Banking Sector Overview Business Highlights Financial Highlights Outlook Annex 35
Slide 36: Business Units
Business Units Solid performance in Retail, Corporate and Commercial. Cards gradually improving. Private impacted by regulatory pressure Weight in Bank Customer Revenues Y/Y Revenues1 Drivers of Revenue Growth Business2 (mln TL) (1H12 – 1H11) 42% 35% Revenues R di driven b by high hi h margin i loan
Slide 37: Subsidiaries
Subsidiaries Steady performance by subsidiaries. YK Portföy impacted by decrease in mutual fund fee cap p Revenues Revenue ROE Sector Key Highlights (mln TL) (y/y growth) Positioning #1 in total Revenues driven by increase in business volume YK Leasing L i 108 12% 14% transaction volume d despite it
Slide 38: Asset and Liability Structure
Asset and Liability Structure Effective ALM management with well balanced currency structure and healthy liquidity Assets and Liabilities (TL bln) Duration Analysis1 (days) Currency Matching (1H12, TL bln) Local Currency Foreign Currency Other 4.1 Assets Assets Liabilities Assets SHE Liabilities 13.
Slide 39: Total Cost of Funding
Total Cost of Funding Continuous focus on optimising cost of funding, also via diversification of funding sources Cost of Wholesale Borrowings (quarterly) Repo 4.8% 4.6% Funds 4.6% Borrowed 4.3% 4.1% 3.6% 4.0% Total cost of funding 3.6% (quarterly) 3.4% 5.8% 5.7% 2.3% 5.4% 5.3% 5.3% 2Q11 3Q11 4Q11 1
Slide 40: Koç Holding: Largest conglomerate in Turkey
Largest conglomerate in Turkey with leading positions in energy, automotive, consumer durables and finance Financial Highlights Established in 1926, Turkey's largest industrial and services group in (in US$, 30 June 2012) terms of turnover and exports with 81 thousand employees 248th largest com
Slide 41: UniCredit: Systematically important financial institution in Europe
Systematically important financial institution in Europe with a widespread network and broad customer base Financial Highlights UniCredit is the result of the merger of nine of Italy's largest banks and the (in US$, 30 Jun 2012) subsequent combination with the German HVB Group and the Italian Capi
Slide 42: Analyst Coverage
Analyst Coverage Equity Fixed Income Autonomous Research Geoffrey Elliott Corinne Cunningham Bank of America Merrill Lynch Ecem Nalbantgil Tolu Alamutu Barclays Capital Cristina Marzea Antoine Yacoub Citigroup Emre Izgi Rodney Thomas Credit Suisse Ateş Buldur Bernhard Obenhuber Deutsche Securities K
Yapı Kredi — Debt Investor Presentation (October 2012) on 6ix