Yapi ve Kredi Bankasi (YKBNK) Q2 2024 earnings summary

Executive summary

• Net income for H1 2024 was TL 17.4 billion, down 28% year-over-year, with a return on tangible equity of 19.5%, impacted by macroeconomic normalization and headwinds.

• Customer base exceeded 16 million, with over 1 million new customers year-to-date, and strong growth in assets under management.

• Asset quality remains robust, with NPL ratio below sector average, strong collections, and improved coverage.

• Strategic focus on customer acquisition, especially salary and pension customers, has driven demand deposit growth and product penetration.

• Cash and non-cash loans reached TL 1.597 trillion; total deposits stood at TL 1.232 trillion.

Financial highlights

• Cumulative net profit for H1 2024 was TL 17.4 billion, with return on tangible equity at 19.5% and return on assets at 1.7%.

• Total assets reached TL 2.32 trillion, up 25% year-over-year; loans grew 29% and customer deposits rose 17%.

• Net interest margin (NIM) bottomed at 33 bps in H1 but is expected to recover, with an exit NIM above 4.5% by year-end.

• Net fees and commissions income surged 173% year-over-year to TL 36.0 billion, fully covering operating expenses.

• Cost-to-average asset ratio is 3.4%, the lowest among peers.

Outlook and guidance

• NIM is expected to reach around 2% by year-end and above 4.5% as the starting point for next year, assuming a rate cut in Q4.

• Return on tangible equity is guided to mid-to-high 20s for 2024.

• Year-end cost of risk is now expected below 75 bps, revised down from 100 bps.

• Real TL loan growth and double-digit FX loan growth are targeted, with core revenue margin around 6%.

• Effective tax rate is expected to be higher in the second half.