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, with ROE/ROTE at 23.4% and ROA at 1.7%, driven by strong core business income and robust fee growth.

• Core revenue margin expanded to 6.6%, supported by selective lending, strategic pricing, and cost optimization.

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

• Maintained prudent provisioning and strong asset quality, with NPL ratio at 3.4% and cost of risk at 1.78%.

• Operating environment saw volatility post mid-March, with central bank hiking rates to 49% to counter inflation and currency pressures.

Financial highlights

• Net interest margin widened 136 bps year-to-date to 2.1%; NII up 31% quarterly and 87% year-over-year to TL 15.3 billion.

• Net fee and commission income rose 44% year-over-year to TL 24.1 billion; card fees up 7% QoQ and 53% YoY.

• Operating costs increased 53% year-over-year and 10% QoQ, mainly due to inflation and customer acquisition costs.

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

• Fee coverage of OPEX at 91%; cost to average assets at 4%.

Outlook and guidance

• 2025 guidance targets TL loan growth below inflation, mid-teens FX loan growth, and 300bps NIM improvement.

• Fee growth guidance has upside risk due to higher-than-expected inflation; fee income targeted to increase by 25–30%.

• Cost of risk guidance maintained at 150–175 bps for the year, barring further rate hikes.

• ROTE expected in the mid-twenties; cost growth to remain below 50%.