LOAN GROWTH AT YAPI KREDI TO DROP IN 2011

Yapı Kredi sees 2011 loan growth dropping below 25 percent

Loan growth at Yapı Kredi Bank, the Turkish bank part-owned by UniCredit, Italy’s largest, will probably fall as much as 40 percent in 2011, General Manager Faik Açıkalın said.

Profits are also likely to fall while credit growth drops from nearly 40 percent in 2010 to below 25 percent this year, Açıkalın said at a dinner with reporters in Istanbul on Wednesday night.

Regulation from the Central Bank, which has been trying to rein in a credit boom to control a ballooning current account deficit, increased competition and unpredictable oil prices driving inflation pose the biggest challenges, Açıkalın said.

“It definitely won’t be an easy year, we all know that,” he said. “We’re going to see banks that anticipate these moves doing better than their competitors.”

Yapı Kredi expects a 75 basis point hike in the benchmark interest rate by the fourth quarter and gross domestic product growth of 4 to 4.5 percent this year, down from an estimated 8 percent in 2010, Açıkalın said.

The lender increased profits 52 percent last year, more than any other Turkish bank, according to him.

“We’re in a position where we can sustain our profitability,” he said. “We’re looking for controlled, intelligent, sustainable growth: that means the right product at the right prices for the right customers.”

Yapı Kredi may open a branch in the northern Iraqi city of Arbil, he said.

Turrkey’s Vakıfbank and İşbank recently opened their first branches in the city.

Otherwise, the company is focusing on growth in Turkey, where it plans to open 50-60 new branches this year, he said.

Açıkalın said he didn’t expect a fine from Turkey’s Competition Board, which has been investigating an unwritten agreement among banks 10 years ago not to poach clients.

“The investigation has accomplished its goal,” he said. “It’s increased awareness of competition rules. We’re all re-evaluating all of our contracts.”

The board’s decision is due March 10.

Thursday, March 3, 2011
ISTANBUL – Bloomberg