Yapı Kredi 1H20 Investor Presentation
Yapı Kredi: A leading financial services group Yapı Kredi Overview Key Figures – 1H20 Market Share – 1H20 Moody’s: Caa1 / Fitch: B+ Market Share 5 Ratings 8.7% Cash & Non-cash Loans Loans 1 Total Assets Total Bank 444.4 254.7 8.4% Customer Deposits bln TL bln TL Corporate Loans 6 7.7% 2 Net Income RoATE Business Consumer Loans 7 7.5% 2,461 Units 12.1% mln TL 17.5% Credit Card Outstanding Leasing 8 20.2% Number of Employees 4 3 Branches 845 17,338 Factoring 8 15.7% Subsidiaries 13.1% 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: 16,507, 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 26 Jun ’ 20 , 6. Cash loans excluding credit cards and consumer loans, 7. Including mortgages, GPL and auto loans, 2 8. As of Mar’20 , 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 45 Branches 769 Branches 21 Branches Subsidiaries Factoring Leasing Invest Asset Management Nederland Azerbaijan Malta Notes: 3 Branch numbers are as of Jun’20 . Total # of branches is 845 of which 6 are free zone, abroad, custody and moblie branches 1. Including micro+ small + large size enterprises
Stable, long-term focused majority shareholder supporting Yapı Kredi’s strategy Largest business group in Turkey with combined Free Float revenue equal to 8% of Turkey’s GDP * 30.03% Koç Holding 1H20 Koç Group 49.97% Total Assets (TL bln) 570.8 Revenues (TL mln) 73,967 UniCredit Net Income (TL mln) 4,431 20.00% Koç Holding Ratings: Moody’s: B 2 / S&P: BB- Notes: Koç Group indicates Koç Holding and its affiliates 4 * As of 2019 year-end All information and figures regarding Koç Holding are based on publicly available 1H20 data, unless otherwise stated
2.5 bln TL net profit in 1H20 thanks to ongoing strength in PPP generation, conservative provisioning through solid fundamentals 1 Total Provisions 2 Net Profit Pre-Provision Profit +22% +4% 2,461 3,932 2,361 7,071 3,192 5,802 Ordinary PPP/Gross 2,450 12.5% 12.1% 4.5% 5.1% RoTE Provisions Loans Including 630 mln TL additional provisions for 90-180 dpd 1H19 1H20 1H19 1H20 1H19 1H20 Fundamentals LDR 3 LCR 4 Tier 1 Ratio (w/o forbearance) 5 TL LDR 129% 124% 117% FC LCR 226% 430% 306% 190% 13.7% 13.0% 104% 100% 162% 97% 11.4% 136% 9.55% 2018 2019 1H20 2018 2019 1H20 2018 2019 1H20 Notes: 1. 1H19 PPP with normalised CPI linker income for homogenous comparison (reported : 6,084 TL mln) 2. ECL + other provisions 3. LDR= Loans / (Deposits + TL Bonds) 5 4. Based on past three months averages 5. 1H20 Reported Tier 1 Ratio at 15.0%
Well above Asset Ratio together with solid liquidity levels thanks to ALM strategies in place for two years Asset Ratio 2 Liquidity ST 1 FC External > 115% > 110% > 105% > 100% Liquidity Debt Short Term (1 year) 3.5x above 4.0 April May June Recent ST Debt bln USD 14 bln USD Long Term (Over 1 year) • 7.5 High Liquidity levels maintained, 3.5x bln above ST FC external debt USD • Asset Ratio comfortably above 100% Notes: Based on Bank-only MIS data 1. 1 month liquidity 6 2. Based on MIS data
TL driven loan and deposit growth; substantial increase in demand deposits, reaping the benefits of the strategy Volumes Loan volumes (TL bln) Deposit volumes (TL bln) Private Banks 1 Private Banks 1 Yapı Kredi Yapı Kredi 1H20 ytd q/q ytd q/q 1H20 ytd q/q ytd q/q Cash+Non-cash Loans 2 349.0 9% 4% 14% 7% Customer Deposits 244.4 8% -1% 9% 2% TL 3 174.0 9% 6% 15% 8% TL 115.1 16% 3% 7% 3% FC ($) 3 25.6 -5% -3% -3% -2% FC ($) 18.9 -11% -9% -4% -5% Cash Loans 2 254.7 11% 5% 15% 7% Customer Demand Deposits 84.1 62% 39% 55% 30% TL 3 145.2 9% 7% 16% 9% TL 31.4 52% 43% 40% 34% FC ($) 3 16.0 -2% -2% -2% -1% FC ($) 7.7 47% 31% 43% 21% Cash Loan Breakdown (FX adjusted ) 4 Demand Deposit evolution FC Demand Deposit / FC Deposit TL Demand Deposit / TL Deposit +16pp +6pp Total Corporate & 34% Commercial 40% 55% 58% 27% Loans 21% 24% Market share 1 15.5% 16.7% 13.4% 14.4% Retail Loans 45% 42% 2019 1H20 2019 1H20 Strong Market Share gain 2018 1H20 YtD TL Demand: +123bps FC Demands: +94bps Notes: Q/Q TL Demand: +161bps FC Demands: +115bps 1. Private banks based on BRSA weekly data as of 26 June 2020 2. Cash Loans indicate performing loans excluding factoring and leasing receivables 3. TL and FC loans are adjusted for the FX indexed loans 7 4. Based on MIS data adjusted for FX, Retail includes individual, credit cards and SMEs
A well diversified loan mix prudently staged and solidly covered Lending Sectoral breakdown of Loans Loan postponements: ~470k customers, ~4.0% of total loans with 3% coverage (additional prov: 235 13 sectors; 11% mln TL) Commercial RE 1.5% Chemicals 1.9% Business Services 2.0% Refined Petroleum Loans 90-180 days past due: 1.2 bln TL with 64% 2.1% Glass,Cement &Ceramics 2.1% Machinery coverage (additional prov: 630 mln TL) 2.2% Wholesale trade 2.7% Tourism 3.0% Energy Sector total coverage at 15.4%, 46.7% of Transportation 3.1% Retail Trade the loans are under Stage 2 Health & Education 3.4% Automotive 3.6% Energy Sector Risky Stage 2 files’ coverage at 32% Finance 4.4% Infrastructure and other construction coverage at Metals 4.5% 12.2% Food&Bevarge&Tobacco 4.9% Textile Total Real Estate loans Stage 2 coverage at 15.4% 5.3% Infrastructure & Tourism Sector share in total at 2.7% with a total 10.7% Other Construction coverage of 3.8%. 11.2% of loans are under Stage 2 Transportation Sector is 3% of total loans o/w 3.6% Energy 11.5% are under Stage 2 with a coverage of 14.3% Only 4.7% of loans under Stage 2 in automotive sector with a coverage of 14.3% Individual Lending 20.6% Limited 7% share of SMEs in total loans, 65% of which is under CGF scheme Notes: 8 Loans include cash and non-cash loans
Ongoing strength in revenue generation up 20% yoy … Stable ytd revenue margin despite the regulatory impacts on fees Revenues Revenues 1;2,3 (TL mln) Core Revenue Margin +20% Cumulative Cumulative Stable 11,168 9,307 5.0% 5.0% 10,146 Core 2;3 8,667 Other 1 1,023 641 2019 1H20 1H19 1H20 Quarterly Quarterly -5% 5,738 5,431 5.2% 5.2% 5.0% 4.9% 4.8% 3,797 4 3,582 NII 1,521 Fees 1,246 Other 1 634 388 2Q19 3Q19 4Q19 1Q20 2Q20 1Q20 2Q20 Notes: 1. Revenues and other revenues exclude ECL collection income and trading income to hedge FC ECL 2. Core Revenues = NII + swap costs + net fee income 9 3. 1H19 Revenues and Core Revenues with normalised CPI linker income for homogenous comparison (reported : Revenues: 9,589 TL mln; Core: 8,948 TL mln) 4. Including swap costs
Continuous NIM expansion through support of small ticket focus and interest rate environment Revenues - NIM Swap Adjusted NIM NIM Evolution Core NIM: +109 bps Cumulative +26bps +35bps +220bps -13bps -21bps 3.72% 3.47% -35bps -11bps 3.7% 3.5% -146bps 2019 Loan Yield Deposit Swap Costs Securities RRs Other Fee 1H20 2019 1H20 Cost financial accounting ins. Quarterly Core NIM: +27 bps 3.8% 3.7% 3.5% 3.5% 3.4% +35bps +7bps 3.77% 3.68% +19bps -4bps -21bps -27bps 1Q20 Loan Yield Deposit Cost Swap Costs Securities RRs Other 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 financial ins. Notes: 10 Based on Bank-Only financials
Limited decline in Loan-Deposit spread q/q supported by further improvement in deposit costs; very strong ytd performance Loan-Deposit Spread Loan – Deposit Spread Evolution Deposit Costs Loan-Deposit Spread Loan Yields (Quarterly) (Quarterly) (Quarterly) Further 31 bps improvement in A limited 35 bps decline in Loan- Controlled decrease of 66 bps in total cost of deposits q/q mainly Deposit Spread vs. 1Q20 loan yields (TL: -111bps) vs.1Q20 thanks to 42bps decline in TL Cumulative Spread significantly above given the lower interest rate deposit costs also supported by the 2019 levels environment downward trend in FC deposits Cum. TL spread Cum. TL cost Cum. TL yield 2019 : 2.8% 2019 : 13.8% 2019: 16.6% 1H20 : 5.9% 1H20: 6.8% 1H20: 12.7% TL+FX TL TL TL TL+FX TL+FX 6.58% 6.01% 6.23% 15.8% 17.2% 17.2% 5.18% 4.53% 14.0% 6.32% 5.62% 14.7% 4.94% 3.19% 13.3% 9.8% 12.5% 1.36% 12.4% 12.2% 8.0% 7.2% 7.0% 11.2% 6.6% 10.4% 5.2% 9.7% 3.8% 3.5% 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 Notes: Based on Bank-Only financials 11
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