Yapi ve Kredi Bankasi A.S. · BIST:YKBNK
Yapi ve Kredi Bankasi A.S — Yapı Kredi — Q1 2013 Earnings Presentation
38 slides from Yapi ve Kredi Bankasi A.S's earnings presentation, May 7, 2013
Slide 1: Yapı Kredi 1Q13 Earnings Presentation
Yapı Kredi 1Q13 Earnings Presentation Istanbul, 7 May 2013
Slide 2: Agenda
Agenda Operating Environment 1Q13 Results (BRSA Consolidated) Outlook / Key Strategic Guidelines 2
Slide 3: Supportive macro environment with sound fundamentals and positive growth trend
Supportive macro environment with sound fundamentals and positive growth trend backed by proactive monetary policy Macro Key Macro Indicators Monetary Policy Indicators 2012 1Q13 GDP Growth 2.2% 2.8% Upper Band (O/N Lending Rate) 9.00% 8.75% Inflation 6.2% 7.3% 8.50% 7.50% 7.00% Benchmark Rate 6.2%
Slide 4: Healthy volume growth driven by local currency with limited pressure on NIM
Healthy volume growth driven by local currency with limited pressure on NIM and asset quality Banking Sector Banking Sector Volumes and KPIs Drivers of Loan Growth (annualised) Nominal Quarterly Growth bln TL 1Q13 1Q12 4Q12 1Q13 Total Loans1 789 2% 5% 5% TL 576 4% 5% 6% 9.8% FC ($) 118 4% 4% 0% Tota
Slide 5: Agenda
Agenda Operating Environment 1Q13 Results (BRSA Consolidated) Outlook / Key Strategic Guidelines 5
Slide 6: 1Q13 Highlights
1Q13 Highlights Focus on value generating growth driven by mortgages, general purpose loans Unyielding focus on and SME. Leadership position in credit cards in all parameters reinforced with customer-business 1Q results (outstanding, acquiring and issuing volume, number of cardholders1 and number of
Slide 7: Key performance indicators above target
Key performance indicators above target with further improvement anticipated in upcoming quarters KPIs Net Income (mln TL) Return on Average Equity2 Tangible ROAE 14.7% Comparable1: 17.3% 1 +50%1 622 1 1 +310bps 16.2% 544 13.1% 415 13.8% Cost of Risk (net of collections) 1.21% -15bps 1Q12 1Q13 1.06%
Slide 8: Comfortable capital adequacy level with Basel II Bank CAR at 16%
Comfortable capital adequacy level with Basel II Bank CAR at 16% supported by ongoing initiatives Evolution of Capital Base and Capital Adequacy Ratio (CAR), Bank Excluding 16.3% 16.3%1 impact of dividend 14.8% payment CAR Comfortable 16.0% CAR band (12.5%-14.5%) 1 10.8% Core Tier-I 11.3% 10.8% 10.5
Slide 9: 544 mln TL net income driven by robust core revenue performance
544 mln TL net income driven by robust core revenue performance and disciplined cost control Income Statement mln TL 1Q12 1Q13 y/y Comparable Basis1 Total Revenues 1,535 1,815 18% 22% Revenues +18% y/y (+22% on Core Revenues 1,473 1,778 21% 24% a comparable basis1) driven by core revenues. Core re
Slide 10: Customer-oriented balance sheet supported by value generating growth
Customer-oriented balance sheet supported by value generating growth Balance Sheet bln TL 1Q12 2012 1Q13 ytd∆ y/y∆ Loans +4% ytd driven by growth in Total Assets 115.4 131.5 135.3 3% 17% value generating segments Loans 69.5 77.8 80.6 4% 16% Loans / assets up to 60% (vs 59% in Securities 20.7 22.
Slide 11: Solid revenue growth driven by positive evolution of core revenues
Solid revenue growth driven by positive evolution of core revenues Revenues Revenues (mln TL) Other Income Breakdown (mln TL) Comparable y/y Basis:1 1Q12 4Q12 1Q13 1,815 Other Income 62 401 37 18% 22% Trading&FX (net) -46 148 -88 1,535 o/w Eurobond Sale Gain 0 206 0 Collections & Provision Reversals
Slide 12: Positive annual NIM evolution with limited quarterly compression
Positive annual NIM evolution with limited quarterly compression thanks to significant decline in deposit costs despite pressure on yields Net Interest Margin Net Interest Margin (NIM) 1 (bank-only) Yields and Costs (bank-only) Cumulative Quarterly Local Currency Foreign Currency Loan Yield 13.2% 13
Slide 13: Strong +21% y/y growth in Bank fees
Strong +21% y/y growth in Bank fees mainly driven by consumer lending activity and bancassurance focus Fees & Commissions Net Fees & Commissions (mln TL) Fees Received Composition (bank-only) y/y 467 19% 2% Insurance 394 -87% 4% (+39% y/y) Other 1 Subs 2% Asset Man. 11% 3% (-7% y/y) (+33% y/y) Card
Slide 14: Balanced growth with focus on high yielding segments/products
Balanced growth with focus on high yielding segments/products Loans Loans Loan Composition by Currency by Product YKB YKB Sector Market 1Q13 1Q13∆ 1Q13∆ Share Credit Cards 18.9% Share of 1 retail loans: Total Loans 80.6 4% 5% 9.8% Auto 48% 1.4% TL 55.4 2% 6% 9.5% GPL 9.0% FC ($) 13.9 3% 0% 10.5% Hou
Slide 15: Significant TL deposit growth and solid increase in demand deposits
Significant TL deposit growth and solid increase in demand deposits Deposits Deposits Deposit Composition by Currency Demand Deposit/Total Deposits YKB YKB Sector Market 1Q13 1Q13∆ 1Q13∆ Share 16.4% 16.5% 16.4% Total Deposits 73.8 4% 3% 9.0% 16.0% FC 42% 39% 15.5% TL 45.2 10% 3% 8.8% FC ($) 15.8 -9%
Slide 16: Sustained discipline in cost management
Sustained discipline in cost management Costs Total Costs (mln TL) y/y 798 7% Total costs +7% y/y driven by disciplined 747 6% Other1 10% approach at Bank level (5% y/y) 6% HR costs +12% y/y. Group headcount +77 in 1Q to 17,538 (Bank headcount 52% stable) o/w +56 agents for YKS and YKE Non-HR2 5
Slide 17: Controlled asset quality evolution
Controlled asset quality evolution Asset Quality NPL Ratio NPL Inflows and Collections (mlnTL) -21% 793 6.3% 723 595 628 477 408 422 412 404 346 3.4% 3.2% 3.4% 3.0% 1Q12 2Q12 3Q12 4Q12 1Q13 2009 2010 2011 2012 1Q13 Collections / Peer Avg: NPL Inflows2 72% 69% 58% 56% 64% 40% in 1Q NPL Ratio by Segme
Slide 18: Relatively stable NPL coverage and below through-the-cycle cost of risk
Relatively stable NPL coverage and below through-the-cycle cost of risk Asset Quality Specific and General Provisioning Cost of Risk1 (Cumulative, net of collections) General provisions/NPL Specific Specific provisions/NPL Total 111% 111% 110% 3.72% 46% 49% 46% 3.14% 1.35% 1.06% 65% 62% 64% 0.81% 0.
Slide 19: Solid performance in commercial effectiveness
Solid performance in commercial effectiveness Commercial Effectiveness Core Revenues/Employee (ths TL) Loans/Employee (ths TL) Deposits/Employee (ths TL) 4,832 5,237 Productivity 450 +16% +18% +24% 381 4,502 4,108 YKB YKB +15% 3,895 362 4,054 3,718 +5% YKB +9% Sector 330 3,730 Sector Sector 1Q12 1Q1
Slide 20: Ongoing solid contribution from subsidiaries
Ongoing solid contribution from subsidiaries Subsidiaries Revenues Revenue ROE Sector (mln TL) (y/y growth) Positioning Drivers of Revenue Growth #1 in total Solid volume growth and strong fee YK Leasing 55 9% 12% transaction volume generation (17.6% mkt share) #1 in total factoring Declining vo
Slide 21: Agenda
Agenda Operating Environment 1Q13 Results (BRSA Consolidated) Outlook / Key Strategic Guidelines 21
Slide 22: 2013 guidance confirmed, backed by positive macro evolution
2013 guidance confirmed, backed by positive macro evolution 2013 Outlook GDP Growth 4.8% 2013 Macro1 CPI Inflation 6.4% Policy Rate 5.0% Current Account Deficit / GDP 6.6% Sector YKB ~20% TL loan growth via market share gains in value Loans 17% 18% generating segments / products, ~13% FC loan driven
Slide 23: Key strategic guidelines in place to deliver sustainable long-term performance
Key strategic guidelines in place to deliver sustainable long-term performance Key Strategic Guidelines Strategic pillars Healthy and consistent growth Strong and sustainable profitability Superior and long-lasting customer satisfaction Integrity, «easy to work with» approach Focus on core banking a
Slide 24: Agenda - Annex
Agenda Operating Environment 1Q13 Results (BRSA Consolidated) Outlook / Key Strategic Guidelines Annex 24
Slide 25: Agenda
Agenda Detailed Performance by Strategic Business Unit Other Details 25
Slide 26: Definitions of Strategic Business Units
Definitions of Strategic Business Units Retail: - SME: Companies with turnover less than 5 mln US$ - Affluent: Individuals with assets less than 500K TL - Mass: Individuals with assets less than 50K TL Private: Individuals with assets above 500K TL Commercial: Companies with annual turnover be
Slide 27: Strong performance in almost all segments driven by declining funding costs
Strong performance in almost all segments driven by declining funding costs and solid fee growth Business Units (bank only) Weight in Bank Customer Revenues Y/Y Drivers of Revenue Growth Revenues1 Business2 (mln TL) (1Q13 – 1Q12) 44% 35% Retail3 654 Strong fee generation in individual segment 11%
Slide 28: Diversified revenue mix with retail focused loan and deposit portfolio
Diversified revenue mix with retail focused loan and deposit portfolio Strategic Business Units Revenues and Volumes by Business Unit (1Q13, Bank only) Retail 38% (including individual, SME and card 52% payment systems1) 54% 56% 56% 63% Private 25% Corporate 2% 0.2% 9% 16% Commercial 20% 20% Treasur
Slide 29: Retail Banking: ~66% of revenues generated by SME business
Retail Banking ~ 66% of retail banking revenues generated by SME business Retail Banking Composition (1Q13) 6.5 mln TL 654 mln TL 25.9 bln TL 26.1 bln Mass Segment: ~5.4 mln SME 10% active customers generating: - 24% of retail revenues Affluent 6% 26% - 34% of retail loans 46% - 28% of retail depo
Slide 30: Retail (Mass & Affluent)
Retail (Mass & Affluent) Value generating growth driving revenue performance Revenues/Customer Business1 TL mln 1Q13 ytd Revenues (y/y) 225 7% Loans 14,019 6% Deposits 19,326 0.1% 2.7% 2.6% AUM 2,275 0.2% % of Demand in Retail Deposits 16% -0.3 pp % of TL in Retail Deposits 74% 0.1 pp % of TL in Ret
Slide 31: Retail (SME)
Retail (SME) Revenues driven by strong fee growth and positive spread evolution Revenues/Customer Business1 TL mln 1Q13 ytd Revenues (y/y) 429 12% Loans 11,895 3% 9.2% 9.1% Deposits 6,840 9% AUM 610 -2% % of Demand in SME Deposits 43% 0.9 pp % of TL in SME Deposits 72% 1.5 pp % of TL in SME Loans 96
Slide 32: Card Payment Systems
Card Payment Systems Leadership position reinforced with 1Q results in all parameters (outstanding, acquiring and issuing volume, number of cardholders6 and number of credit cards) 1Q13 ytd y/y Net Revenues1 (mln TL) 254 39% # of Credit Cards2 (mln) 9.5 2% 12% # of Cardholders (mln) 5.4 1% 6% # of M
Slide 33: Private
Private Revenues impacted by pressure on deposit costs despite solid fee generation TL mln 1Q13 ytd Revenues/Customer Business1 Revenues (y/y) 37 -16% Loans 178 -14% Deposits 17,276 3% AUM 2,969 5% % of Demand in Private Deposits 4% 0.0 pp 0.9% 0.7% % of TL in Private Deposits 63% 1.4 pp % of TL in
Slide 34: Corporate
Corporate Strong revenue growth via selective growth strategy TL mln 1Q13 ytd Revenues/Customer Business1 Revenues (y/y) 133 20% Loans 11,654 2% Deposits 13,536 -6% AUM 1 13% 1.9% 2.0% % of Demand in Corporate Deposits 6% -0.3 pp % of TL in Corporate Deposits 46% 6.1 pp % of TL in Corporate Loans 13
Slide 35: Commercial
Commercial Revenues impacted by pressure on loan yields due to competition TL mln 1Q13 ytd Revenues/Customer Business1 Revenues (y/y) 290 -1% 4.5% 3.8% Loans 20,362 3% Deposits 11,711 25% AUM 185 3% % of Demand in Commercial Deposits 25% -5.2 pp % of TL in Commercial Deposits 64% 7.4 pp % of TL in C
Slide 36: Agenda
Agenda Detailed Performance by Strategic Business Unit Other Details 36
Slide 37: Securities
Securities 70% of securities portfolio invested in AFS Securities Composition by Type Securities Composition by Currency (TL bln) FC TL 20.7 22.5 20.9 Trading 3% 4% 2% 48% 46% 46% AFS 39% (1% FRN) (1% FRN) (1% FRN) 70% 70% HTM 58% 52% 54% 54% (53% FRN) (68% FRN) (68% FRN) 26% 28% 1Q12 2012 1Q13 1Q12
Slide 38: International Borrowings
Borrowings (as of May’13) ~ US$ 2.7 bln outstanding Syndications Apr’13: US$ 437 mln and €759.5 mln, Libor +1.00% p.a. all-in cost, 1 year, participation of 52 banks from 20 countries Sep’12: US$ 322 mln and €618 mln, Libor + 1.35% p.a. all-in cost, 1 year, participation of 37 banks from 16 coun