Yapı Kredi 9M19 Investor Presentation
Yapı Kredi: A leading financial services group Yapı Kredi Overview Key Figures – 9M19 Market Share – 9M19 Moody’s: B3 / Fitch: B+ Ratings Market Share 5 9.6% Cash & Non-cash Loans Loans 1 Total Assets Total Bank 396.9 222.4 9.4% Customer Deposits bln TL bln TL Corporate Loans 6 8.4% 2 Net Income RoATE Business Consumer Loans 7 8.1% 3,337 Units 11.8% mln TL 19.8% Credit Card Outstanding Leasing 8 22.0% Number of Employees 4 3 Branches 854 17,798 Factoring 8 14.0% Subsidiaries 13.6% Wealth Management 9 Notes: 1. Loans indicate performing loans, 2. RoATE indicates return on average, tangible equity (excl. intangible assets), 3. Bank-only, 4. Group data. Bank-only: 16,950, 5. Market shares are based on: Interbank Card Center (for credit card acquiring and number of cardholders), Turkish Leasing Association (for leasing), Turkish Factoring Association (for factoring), Central Bank Cheque Clearing System (for cheque clearing) Rasyonet (for mutual funds), Borsa Istanbul (for equity transaction volume). If not specified, data based on BRSA bank-only data for YKB and BRSA weekly sector data excluding participation banks for banking sector as of 27 Sep ’1 9, 6. Cash loans excluding credit cards and consumer loans, 7. Including mortgages, GPL and auto loans, 8. Leasing and Factoring market 2 shares as of 1H19, 9. Refers to Mutual Funds
Well-diversified commercial business mix and customer-oriented service model Corporate and Commercial Banking Retail Banking SME Private Corporate Commercial International/ Individual Banking 1 Banking Credit Cards Turnover Turnover Multinational Banking Turnover Total >USD 100 mln USD 10-100 mln <USD 10 mln PFA > TL 500K 1 Branch 3 Branches 46 Branches 777 Branches 21 Branches Subsidiaries Factoring Leasing Invest Asset Management Nederland Azerbaijan Malta Notes: Branch numbers are as of Sep ’1 9. Total # of branches is 854 of which 6 are free zone, abroad, custody and moblie branches 3 1. Including micro+ small + large size enterprises
Stable, long-term focused majority shareholders supporting Yapı Kredi’s growth Shareholding Structure KO Ç FINANCIAL SERVICES 50% 50% Simple, successful, pan- 81.9% 1 Largest business group in European, commercial bank Turkey with combined revenue with a unique Western, equal to 8% of Turkey’s GDP Central and Eastern European network in 14 core markets 9M19 9M19 Total Assets (EUR bln) 23.7 Total Assets (EUR bln) 863 Revenues (EUR mln) 18,033 Revenues (EUR mln) 13,984 Net Income (EUR mln) 518 Net Income (EUR mln) 4,342 Ratings Ratings Moody’s: B1 / S&P: BB- Moody’s: Baa1 / Fitch: BBB / S&P: BBB Strong and committed majority shareholders bringing stability, strength and depth to corporate governance Notes: All information and figures regarding UniCredit are based on publicly available 9M19 data; all information and figures regarding Koç Holding are based on publicly 4 available 9M19 data Remaining 18.1% listed on the Istanbul Stock Exchange
Successful core performance and resilient fundamentals sustained despite challenging operating conditions Net Profit (TL mln) Net Profit at 3.3 bln with RoTE at 11.8% +11% 3,586 Reported Strong performance of PPP corresponding to 4.9% of the 3,337 -7% CPI inf 3,008 loan book; @11% 1 +20 bps ytd NIM widening (excl. CPI impact) +26% y/y fee increase Limited 13% y/y cost growth thanks to efficiency gains 9M18 9M19 Cumulative CoR at 2.53% 2 , with elevated flows in 3Q19 PPP (TL mln) +18% 9,193 Reported 8,450 +9% Backed by a strong balance sheet position; 7,792 CPI inf @11% 1 LCR 3 as high as 176%, FC LCR at 439% LDR further improves: 100% 4.9% PPP /Gross Tier 1 Ratio improved 222bps ytd at 13.6% with a 4.5% Loans strong buffer; thanks to ongoing internal capital generation 9M18 9M19 Notes: 1. 9M18 CPI assumption at 16% 5 2. Consolidated adjusted for FC hedge on ECL 3. Based on past three months averages
Key Financial Figures mln TL 2Q19 3Q19 q/q 9M18 9M19 y/y Volumes TL Loans 1 131,629 129,678 -1.5% 124,763 129,678 3.9% Healthy Volume growth in volatile environment FC Loans ($) 17,493 16,381 -6.4% 20,811 16,381 -21.3% • Decrease in loan book due to deleveraging in FC, with strong TL increase TL Customer Deposits 90,868 90,455 -0.5% 84,676 90,455 6.8% • Balanced deposit growth both in TL and FC FC Customer Deposits ($) 22,354 21,897 -2.0% 21,056 21,897 4.0% P/L 2 Core Revenues 3 4,556 4,600 1.0% 11,788 13,549 14.9% CPI adjusted net profit up by 11% y/y despite Opex 1,793 1,779 -0.8% 4,686 5,285 12.8% elevated level of ECLs, continuous y/y PPP 4 2,948 3,110 5.5% 7,792 9,193 18.0% improvement in PPP for the past 8 quarters thanks to execution of the strategy PPP (Reported) 2,890 3,110 7.6% 8,450 9,193 8.8% Sustainable improvement in core revenues ECL 4 1,577 1,785 13.2% 2,988 4,757 59.2% with widening in the NIM Contained opex increase through efficiency Net Profit 1,170 976 -16.6% 3,008 3,337 10.9% management Net Profit (Reported) 1,120 976 -12.8% 3,586 3,337 -7.0% Ratios Revenue Margin 4.6% 4.7% 8bps 4.7% 4.8% 12bps • Revenue Margin further improves despite NIM (swap adj) 3.3% 3.4% 2bps 3.6% 3.4% -11bps the negative linker impact CoR (bps) 5 2.42% 2.78% 36bps 1.80% 2.53% 73bps • CoR at 2.53% converging towards the Stage 3 Ratio 5.8% 6.7% 94bps 3.7% 6.7% 300bps guidance with NPL inflows RoTE 11.8% 10.1% -166bps 14.3% 11.8% -249bps Notes: 4. Adjusted for FC ECL hedge and collections All data based on BRSA consolidated financials unless otherwise stated. NIM based on bank-only financials 5. Including FC ECL Hedge and collections 1. Performing Loans, excluding Factoring and Leasing Receivables 6 2. Assuming CPI inflation at 11% for 2018 & CPI linker adjustment from 12% to 11% in 2Q19 3. Swap Adjusted
Strong TL loan growth at 7% ytd with ongoing deleveraging in FC loans Lending Loan volumes (TL bln) Yapı Kredi Private Banks 1 2% total loan growth on a ytd basis 9M19 q/q y/y ytd q/q y/y ytd Cash+Non-cash Loans 2 311.0 -4% -12% 2% -3% -12% -1% TL 3 157.3 -1% 3% 7% 0% -3% 1% 7% ytd increase in TL cash loans FC ($) 3 27.2 -5% -19% -10% -4% -16% -10% Cash Loans 2 222.4 -4% -11% 1% -3% -10% 0% TL 3 129.7 -1% 4% 7% 0% -3% 2% -14% ytd contraction in FC cash loans FC ($) 3 16.4 -6% -21% -14% -5% -14% -9% Segment Breakdown of Cash Loans 4 Sectoral Breakdown of Cash and Non-Cash Loans - bank only Other Business 25% Real Estate Real Estate Tourism 3% 3% 3% Health-Education 3% Individual Lending 56% Transportation & 17% 58% Communication 4% Wholesale and Retail Trade 44% 42% 4% Energy Energy Metals 12% 12% 4% 2018 9M19 Finance Retail Corporate & Commercial Infrastructure & other 4% Textiles construction Foods Notes: 5% 11% 1. Private banks based on BRSA weekly data as of 27 September 2019 5% 2. Cash Loans indicate performing loans excluding factoring and leasing receivables 7 3. TL and FC loans are adjusted for the FX indexed loans 4. Based on MIS data adjusted for FX, Retail includes individual, credit cards and SMEs
Strong demand deposit growth with an improved composition towards small tickets Funding Deposit volumes (TL bln) Deposit Breakdown (FX adjusted) 2 Private Banks 1 YKB Corporate & 9M19 q/q y/y ytd q/q y/y ytd 24% Commercial 31% 33% Time Deposits Customer Deposits 214.4 -2% 2% 7% 3% 3% 10% TL 90.5 0% 7% 4% 6% 5% 3% FC ($) 21.9 -2% 4% 2% 2% 7% 9% 54% Retail 51% Time Deposits 48% 85 bps market share gain in demand deposits in one year at 14.5% Demand ≈ 22% 193 bps market share gain in TL individual demand deposits 18% 18% Deposits at 15.9% 9M17 9M18 9M19 Liquidity LDR 3 LCR 5 POS adjusted 4 TL LDR 163% 129% 131% FC LCR 226% 375% 439% TL LDR: 118% 114% LDR: 95% 104% 176% 155% 100% 136% Short term FX Liquidity 6 : ~12 bln USD Run- off’s in 1 year: 4.3 bln USD 7 2017 2018 9M19 2018 1H19 9M19 Notes: 8 1. Private banks based on BRSA weekly data as of 27 September 2019 4. Adjusted for POS merchants blocked deposits 7. Excluding the Syndication that has already been 5. Based on past three months averages 2. Based on MIS data (weekly average) successfully rolled-over in October 3. LDR= Loans / (Deposits + TL Bonds) 6. MIS data 1 month liquidity
Revenue growth prevails with sustainable core revenue improvement thanks to strength in commercial activities Revenues Revenues 1;2 (TL mln) Core Revenue Margin Yearly Cumulative +16% -49bps Reported 14,478 +10% 13,136 CPI inf 12,478 @11% 3 5.3% 36 bps ytd improvement 4 4.8% Reported 13,549 +9% excluding CPI linkers Core 2 11,788 Other 1 690 929 9M18 9M19 2018 9M19 Quarterly 5 Quarterly +3% +8bps 4,889 4,848 4,741 4.7% 4.8% 4.6% 4,600 Core 2 4,556 4,392 Other 1 456 184 289 1Q19 2Q19 3Q19 1Q19 2Q19 3Q19 Notes: 1. Revenues and other revenues exclude ECL collection income and trading income to hedge FC ECL 5. 1Q19 and 2Q19 adjusted for the CPI assumption change from 12% to 11% in 2Q19 2. Core Revenues = NII + swap costs + Net fee income 9 3. 9M18 CPI at 16% 4. MIS, based on daily averages
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