The FINANCIAL — Evaluating Akbank’s 2010 9 month financial results and developments, CEO Ziya Akkurt commented, “After successfully weathering the global crisis, Turkey has become the most remarkable economy of its region during the first nine months of 2010 when the global economy has experienced a structural change in difficulties. Turkish economy is on the way to investment grade with its strong performance. We continue to provide support for the Turkish economy and the real sector in order to better exploit the potential of our country. Total financing that we have just provided through foreign borrowings in the first 9 months of this year reached 4.1 billion dollars. We realized the first direct private sector Eurobond issue in Turkey after that of Turkish Treasury, with our 1 billion dollar Eurobond issued in July. This issue has helped Akbank to become the leading bank in foreign borrowing that sets the rules. We maintain our pioneering role in lowering the borrowing costs of syndicated loans with our strong balance sheet and correspondent bank relations. We are planning to allocate our financial resources to finance the major projects that will accelerate the economic breakthroughs that Turkey aims. The 19.3 % y-t-d growth in our total loans, that reached TL 53.2 billion during the same period, is a significant indicator of our clear and decisive policy on this issue” Akkurt said.
Akkurt underlined that Akbank’s TL loans reached TL 30.7 billion with an above the sector average increase of 27.7 %.
“Our 9-month consolidated net profit in 2010 rose to TL 2,288 million.”
Noting that Akbank posted gross profit of TL 2,841 million in the first nine months of 2010, Akkurt said: “ Akbank reports net consolidated profit of TL 2,288 million after tax provisions of TL 553 million for the same period. Akbank’s net consolidated profit for the 9 month period increased by 13.7 % compared to the same period last year.”
Commenting on the relative slowdown regarding the third quarter profit of the Turkish banking sector, Ziya Akkurt explained “Securities portfolio of the banks consist of CPI linked government bonds of various size. Valuations of those securities fluctuate on a monthly basis depending on the CPI ratio, and affect the period income. Lower income generated from CPI linked securities in the third quarter of the year due to negative inflation figures had a temporary, adverse impact on sector’s income. However, this temporary, adverse affect will fade taking into account the inflation figures announced for the last quarter of 2010. As a result, these portfolios – although their values vary quarter to quarter – represent high yield investments when evaluated on an annual basis.”
“SME and corporate loans increased by 18 %.”
Pointing to the fact that development and growth of SMEs are among the strategic priorities to accelerate the growth of the Turkish economy, Akkurt said, “We are observing an increase in corporate loan demands due to improved confidence in markets, increase in companies’ risk appetite and as a result of their plans to increase their activities and investments. We, as Akbank, continue to support development of SME’s commercial activities with various projects. Akbank’s support through SME and corporate loans reached TL 34.9 billion in the first nine months of 2010.”
Akkurt reminded that Akbank has been focusing on creating sustainable value since its inception and it has always been committed to its ethical, environmental, social and economic priorities as well as its financial performance. He said, “While providing financial resources for the SMEs, we continue to conduct joint projects with multilateral institutions such as European Investment Bank, European Bank for Reconstruction and Development and the World Bank to create cost efficient and long-term new sources to increase energy efficiency, reduce energy costs and to encourage renewable energy projects.”
“Our general purpose loans grew by 34.7 %.”
Akkurt noted that the developments in the first 9 months of the year reflected positively on consumers and stressed, “Low interest environment and positive expectations increased the consumer demand and revived the market. As Akbank, we continue to provide loan support to our customers for all their needs through our branches as well as our alternative distribution channels that offer fast and practical solutions. The total support we provide to our customers via Akbank’s consumer loans increased by 28.5 % y-t-d and reached TL 11.9 billion.” Akkurt also stated that total consumer loans, when evaluated as a total of consumer loans and credit card loans, reached TL 18.3 billion, with an increase of 21.9 %. Akkurt also pointed out to the 34.7 %, 24.9 %, and 12 % increases in Akbank’s general purpose, housing and auto loans in the first nine months of the year, respectively.
“Our risk focused banking approach further lowers our NPL ratio.”
Despite the consensus reached on the necessity of new supervisions and regulations following the global crisis, Akkurt said the implementation of such revisions would take some time. “We continue our effective risk oriented policy during this period of transition without any compromise. Our risk oriented banking approach helped us to further decrease our NPL ratio which was already considerably below the sector average. Our NPL ratio which was around 2.5 % in the second quarter of 2010 dropped to 2.4 % as of end of third quarter.”
Commenting further on NPL provisions, Akkurt underlined that Akbank has continued its 100 % provisioning policy for loans under follow-up and hasn’t changed its general provisioning ratio, sustaining its prudent approach.
“Our TL deposits increased by 17.9 %”
Akkurt stated that the risk focused, high performance of Akbank – a pioneer of its sector with innovative financial solutions – has further strengthened the stakeholders’ confidence and added: “Our leading role in lowering the costs in foreign borrowing and our success in providing international funding of record amount with extensive participation confirmed once again Akbank’s financial strength and credibility. Our total deposits increased by 11.8 % and reached TL 68.2 billion in the first nine months. Our TL deposits increased by 17.9 % and reached TL 40.8 billion in the same period.”
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