Yapi ve Kredi Bankasi (YKBNK) Q1 2025 earnings summary

Executive summary

• Net profit reached TL 11.4 billion in Q1 2025, up 73% quarter-on-quarter and year-over-year, driven by strong core business income, margin expansion, and robust fee growth, with ROE/ROTE at 23.3–23.4% and ROA at 1.7%.

• Total assets grew to TL 2,544 billion, with performing loans at TL 1,295 billion and deposits at TL 1,418 billion as of March 31, 2025.

• Asset quality remained robust, with NPL ratio at 3.4%, prudent provisioning, and cost of risk between 1.78–1.95%.

• Capital adequacy ratios remained strong, with CAR at 14.4–16.8% and CET1/Tier 1 at 10.7–12.7%.

• Raised $1.11 billion in international funding, including a $500 million Eurobond issuance in Q1 2025.

Financial highlights

• Net interest margin widened by 136 bps year-to-date to 2.1%, with NII up 31% quarter-on-quarter and 87% year-over-year to TL 15.3 billion.

• Net fee and commission income rose 12% quarter-on-quarter and 44% year-over-year to TL 24.1 billion, with fee coverage of OPEX at 91%.

• Operating expenses increased 8–10% quarter-on-quarter and 53% year-over-year, mainly due to inflation and investments.

• Pre-provision profit grew 47% year-over-year to TL 20.8 billion.

• Core banking revenues reached TL 34,165 million.

Outlook and guidance

• 2025 guidance maintained: TL loan growth below inflation, mid-teens FX loan growth, and NIM improvement of ~300 bps.

• Fee income targeted to increase by 25–30%, with cost growth below 50%.

• Cost of risk expected between 150–175 bps; return on tangible equity guided to mid-twenties.

• Fee growth guidance has upside risk due to higher-than-expected inflation.

• Net interest margin expected to be under pressure in Q2.