Q2 2025 Yapi ve Kredi Bankasi AS Earnings Call Transcript
Key Points
- Yapi Ve Kredi Bankasi AS (IST:YKBNK) posted a strong net profit of 11 billion Turkish Lira in the second quarter, maintaining the same level as the first quarter.
- The bank's return on tangible equity and return on assets stood at 2.4% and 1.6% respectively, confirming their mid-twenties ROE guidance for the full year.
- Core revenue margin improved by 161 basis points year on year, resulting in an 83% annual improvement in core revenues.
- The bank achieved a strong fee performance with fees increasing by 16% quarterly and 45% year on year, supported by enhanced customer base penetration and payment systems.
- Yapi Ve Kredi Bankasi AS (IST:YKBNK) maintained a robust asset quality with net NPL inflows lower than peers and a total coverage ratio of 3.7%, adjusted to 4% after recent NPL sales.
- The Central Bank's rate cut cycle disrupted improvements in net interest margin, leading to a reduction in the bank's net interest margin improvement target from 300 basis points to 200-225 basis points.
- Operating expenses increased by 6% quarterly and 52% year on year, driven by inflation, customer acquisition costs, and investments in human capital.
- Stage two loans increased by 24% quarter on quarter, primarily due to exchange rate impacts and significant increases in credit risk.
- The bank's CET1 ratio stood at 9.9%, slightly below the desired buffer against regulatory limits, due to market volatility and ongoing business growth.
- There is a noted deterioration in SME asset quality, with expectations of increased NPL inflows in the third and fourth quarters, although still below historical peaks.
Ladies and gentlemen, thank you for standing by. I'm Konstantinoykov's call operator. Welcome and thank you for joining the Yuppie Credi conference call and live webcast to present and discuss the Yuppierey first half 2025 financial results conference call and live webcast.
At this time, I would like to turn the conference over to Mr. Kursat Ketechi, CSO, and Ms. Hilalvaro, head of investor relations and strategic analysis. Mr. Kitechi, you may now proceed.
Good afternoon and thank you all for joining our first of 2025 earningscore.
Starting with the operating environment, Central Bank has adopted a tight policy throughout the 2nd quarter in response to the volatility started in mid-March.
Accordingly, the funding funding rates reached the high end of the corridor and stood at 49 up until mid June.
Following the gradual stabilization, central bank moved back to a weekly funding at policy
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