Top-line weakens; trading line supportive

Core revenues retreat; backed by trading gains
Yapi Kredi posted a 2Q net income of 11,476mTL (- 9% q/q, -4% y/y), in line with both market consensus (11,421mTL) and our estimate (11,529mTL). Trading line appears to be the main supporter of earnings on the back of high FX and derivatives transaction gains. NIM decreased by 2.6ppt q/q due to contracting TL spread and downward revision in October CPI assumption of the bank to 40% in 2Q from 45% in 1Q. Fee income grew thanks to consumer driven loan growth and payment systems contribution. TL spread declined by 3.3ppt q/q on higher deposit costs. Opex grew on rising inflation and earthquake donations. ROE retreated to 34% in 2Q from 39% in 1Q. Yapi Kredi guides for <40% tl="" loan="" growth,=""><4ppt y/y="" drop="" in="" nım,="">90% fee growth and around 100bps net CoR coupled with >30% RoTE for 2023. This guidance is in line with our 23E 31% RoE expectation for Yapi Kredi, indicating 15% y/y drop in net earnings on our estimates.
NIM drops on contracted spread
TL spread shrank 3.3ppt q/q (OYAKe: -83bp) on high deposit costs, while FX spread widened 3.6ppt q/q. Adjusted for FX protected deposit commissions, the drop in TL spread is only 66bps q/q. Reflecting this and y/y lower CPI assumption (40% for Oct23; Oct22: 85.5%), NIM went down by 2.6ppt q/q. Yapi Kredi gained market share in deposits in 2Q. TL loans grew 9.3% q/q vs +11.3% for the sector, while TL deposits expanded 13.1% q/q vs +11.5% for the sector. On FX (USD) side, loans went down 8.7% q/q vs -2.5% for the sector, deposits contracted 2.3% vs -7.5% for the sector.
Asset quality appears intact; provisioning remains strong
NPL ratio went up to 3.7% (1Q: 3.2%) on some fresh NPL inflows, while NPL coverage fell to 69% from 76% in 1Q due mainly to NPL sale of 1.8bnTL. The ratio of stage 2 to total loans, on the other hand, dropped to 12.6% in 2Q (1Q: 12.8%) with 17.0% coverage.
FY23E earnings and OP rating maintained
Yapi Kredi trades attractively at 23E P/BV of 0.7x and 2.5x P/E, while 23E ROE stands at 31%. We revise our target price for Yapi Kredi to 18.18TL from 12.99TL based on our higher long-term ROE estimate for Yapi Kredi. We elevate long-term ROE estimate to 26% from 21% over our forecast period of 2023-30E as we expect now better earnings from 2024 onwards for YKBNK thanks to normalizing monetary policy. We maintain our Outperform rating for the stock.



Oyak Yatırım Menkul Değerler A.Ş.
                                   ***
                               Yasal Uyarı
 
 Burada yer alan yatırım bilgi, yorum ve tavsiyeler yatırım danışmanlığı kapsamında değildir.Yatırım danışmanlığı hizmeti ; aracı kurumlar, portföy yönetim şirketleri, mevduat kabul etmeyen bankalar ile müşteri arasında imzalanacak yatırım danışmanlığı sözleşmesi çerçevesinde sunulmaktadır.Burada yer alan yorum ve tavsiyeler, yorum ve tavsiyede bulunanların kişisel görüşlerine dayanmaktadır.Bu görüşler mali durumunuz ile risk ve getiri tercihlerinize uygun olmayabılır.Bu nedenle, sadece burada yer alan bilgilere dayanılarak yatırım kararı verilmesi beklentilerinize uygun sonuçlar doğurmayabilir.

< 25.07.2023 diğer haberleri için tıklayınız.