Yapi ve Kredi Bankasi (YKBNK) Q4 2024 earnings summary

Executive summary

• Pre-provision profit rose 82% quarter-on-quarter, with net profit for the quarter at 6.6 billion TL and full-year net profit at 29.0 billion TL, yielding ROE of 16% and ROA of 1.3%.

• Pre-tax income and net profit rebounded in 4Q24, but full-year earnings declined due to regulatory and macro headwinds.

• Customer acquisition and proactive pricing strategies led to robust loan and deposit growth, with TL loan yields and deposit costs outperforming peers.

• Asset quality remained resilient, with NPL inflows from unsecured loans stabilizing and coverage ratios further enhanced.

• The bank maintained a strong capital adequacy ratio, with internal capital generation supporting solvency.

Financial highlights

• Total revenues increased 31% quarter-on-quarter to 38 billion TL, driven by core revenues and trading.

• Net interest margin widened by 150 basis points quarter-on-quarter, reaching an exit NIM of around 2%.

• Net interest income rose to TL 75.9 billion, and net fees and commissions income more than doubled to TL 73.1 billion.

• Operating expenses increased to TL 49.9 billion, with cost-to-average asset ratio at 3.7%, the lowest among peers.

• Total assets grew to TL 2.55 trillion, with loans up 39% and deposits up 25% year-over-year.

Outlook and guidance

• 2025 expected to be a transition year with continued macroprudential measures and below-average inflation loan growth.

• Turkish Lira loan growth to remain below average inflation; foreign currency loan growth expected in mid-teens.

• NIM projected to improve by 300 basis points to around 3.7% in 2025.

• Fee growth targeted at 25-30%, with cost growth below 50% and ROTE in the mid-20s.

• Asset quality to remain robust, with total cost of risk guided at 150–175 basis points.