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Edited Transcript of YKBNK.IS earnings conference call or presentation 4-Nov-19 10:59am GMT

Q3 2019 Yapi ve Kredi Bankasi AS Earnings Call

Istanbul Nov 19, 2019 (Thomson StreetEvents) -- Edited Transcript of Yapi ve Kredi Bankasi AS earnings conference call or presentation Monday, November 4, 2019 at 10:59:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Gökhan Erün

Yapi ve Kredi Bankasi A.S. - CEO & Executive Director

* Hilal Varol

Yapi ve Kredi Bankasi A.S. - Head of IR and Strategic Analysis

* Marco Iannaccone

Yapi ve Kredi Bankasi A.S. - COO & Executive Director

* Massimo Francese

Yapi ve Kredi Bankasi A.S. - Assistant GM of Financial Planning & Administration and CFO

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Conference Call Participants

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* Alan Ramsey Webborn

Societe Generale Cross Asset Research - Equity Analyst

* Gabor Zoltan Kemeny

Autonomous Research LLP - Research Analyst

* Simon Nellis

Citigroup Inc, Research Division - MD and Director

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Presentation

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Operator [1]

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Ladies and gentlemen, welcome to Yapi Kredi 9-month '19 earning call and webcast on the 4th of November 2019. (Operator Instructions)

Today's speakers during this conference call are Mr. Gökhan Erün, CEO; Mr. Marco Iannaccone, COO; Mr. Massimo Francese, CFO; Mr. Kürsad Keteci, Strategic Planning and IR EVP; Ms. Hilal Varol, Head of IR and Strategic Analysis. Sir, please go ahead.

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Gökhan Erün, Yapi ve Kredi Bankasi A.S. - CEO & Executive Director [2]

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Yes. Hello. Good afternoon, and thank you all for joining our 2019 9 months' results call. Before going through details of our performance, let me share with you some comments about the operating environment in general.

Turkey has been going through a strong rebalancing for the last 12 months. Domestic demand halted during that period. Yearly GDP contracted for 3 consecutive quarters. But good news in a quarterly view, it has been in a positive territory. As a result, we observed highest level of current account balance in the history of date.

So just to give you a number, 12-month rolling surplus at $5 billion level. Inflation came down to single digits after 25 months. And as we speak, as of today's result, 8.5% inflation for the CPI. This rebalancing ended up lower TL rates at 14 percentage points and also appreciated TL against the basket by 8% in a year time. All these developments were in line with our expectations, as you very well know.

We were expecting the normalization starting -- during the third quarter, where we are seeing first signs already. Considering the tailwind from the global markets scenario, together with further improvement in geopolitics, Turkey will, again, positively differentiate itself within emerging markets, thanks to the actions to restore foreign investors' confidence.

As Yapi Kredi, we will continue act in good faith with corporate fair approach in order to overcome this negative operating environment, to actualize the further potential of our country, Turkey.

Regarding to the Yapi Kredi's performance in 9 months of 2019. We kept the improving strength of the balance sheet, further reducing the LDR to 100% and keeping the Turkish lira LDR at 131%, solid liquidity with LCR at 176%. And lastly, we continued to increase capital buffers against regulatory limits to around 400 to 450 basis points.

In parallel, we have managed to increase our pre-provision profit further, thanks to the implementation of our strategy. With this level of top line, we have much more room to deal with provisions needs. As you're all aware, conclusion on BRSA routine financial health report audit findings will be materialized until the end of this year. We are running the same regular process that we do each and every year with BRSA, and which will be implemented by December. We will be giving more details when we present the 2019 guidance page at the end of our presentation.

Thanks to our continuous improvement in fundamentals and revenue generation, our stock performance also significantly outperformed the banking index. Our performance was [48] as of today's closing versus 19% of the banking index. I would like to thank to our -- all shareholders for their confidence on our performance. Before starting the presentation, I would also like to thank the dedicated workforce of Yapi Kredi for their extensive effort during and for showing again their commitment to the country and, of course, to the bank.

Now moving to the Page 2. We reached TRY 3.3 billion of net profit as of end of 9 months, which is 11% higher than the same period of last year on, of course, a comparable basis. Our cumulative ROTE is at 11.8%. Better than guidance performance was driven by strength in our core performance with another strong year-on-year growth in [pre-provisioning] profit by 18% comparable basis; reported, as you see here, 9 percentage. Which is again the highest amongst peers so far.

Thanks to our strong pre-provision performance, which is 4.9% of gross loans, we are able to keep also our overcautious approach for the asset quality side as well. And our performance improved through 20 basis points year-to-date widening of the NIM. Thanks to improvement in Turkish lira loan-to-deposit spreads by 65 basis points achieved through changing composition, very in line with our strategy towards individual and also strong demand deposit improvement.

Another strong quarter for fees again, where we increased our fee income by 7%, and 26% year-on-year. With cost growth only at 13% year-on-year, where we have the best-in-class operational efficiency gains. I would like to add that these gains are driven by our continuous investments and process improvements.

Cumulative cost of risk at 2.53% with elevated level in the last quarter, which is 2.78%, close to 2.8%. We keep increasing our total coverage over our loan book. We will give more details on asset quality in the coming pages.

These successful results are backed by a strong balance sheet, as we communicated. In terms of LDR at 100% and TL LDR 131%, resilient levels of LDR achieved through improvements in especially retail deposits and also cautious FX lending. Also, I would like to remind you that considering the merchant payables, so then the ratio adjusted both for the TL -- for the total LDR, 95% and total TL LDR goes to 118%. Considering the macroeconomic developments, we will be selling around, I think, between 100% and 105% of the LDR until the end of this year. So we have 2 months -- 2 more months to go, in line with our targeted levels.

Our strategy to focus on small tickets, transactional banking, are paying off. We reached 176% LCR. (inaudible) LCR more than 400 basis points, reaching to 139 levels. Our short-term FX liquidity is around $12 billion, up to 1 month. And just to mention, our upcoming runoffs are just at $4.3 billion in 1 year horizon. So no issues whatsoever in terms of liquidity as well.

Our capital ratios improved significantly, thanks to our ongoing internal capital generation. CET1 at 12.5% with 400 basis point buffer. As of -- also, as you may recall, we are committed to keep 200 basis points against the limit. Tier 1 ratio at 13.6% and total cash at 16.7% with a buffer of 464 basis points.

And now, I'm leaving the floor to Marco Iannaccone.

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Marco Iannaccone, Yapi ve Kredi Bankasi A.S. - COO & Executive Director [3]

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Thank you very much, Gökhan. Before diving into some of the details, I would like to go through some of the key financials that are presented on Page 3.

As already mentioned, we had a healthy growth -- volume growth when the volatility was sustained, specifically on TL loans were stronger when the deleveraging on the FX loans continued, but mostly due to lack of demand. And deposit growth was balanced in between TL and foreign currency, and we will go through the details of those indicators in the next pages.

Continuous improvement in the pre-provision profit for the past 8 quarters more than compensated elevated level of ECL, and the net profit adjusted for CPI impact increased 11% year-on-year in the first 9 months.

Moving to Page 4. The TL loan increased 7% year-to-date and with a substantial improvement in the lending rates and better customer segments, we supported the lending growth also on the fourth quarter of this year. So we expect this trend to continue. As a result, we are looking at a double-digit growth in TL loans by the end of 2019.

The deleveraging on the FX side continues. Again, as we said, mostly due to lack of demand. Not likely to see any positive trend or material positive trend for the rest of the year, so we will expect to see a similar number that we see today, which is minus 14% FX cash loans year-to-date.

As you can see in the bottom left chart, the diversification in lending growth towards small ticket is sustained and continued. The retail portion of the loan increased by 2 percentage points in the total loan book, which is also then supporting the yield on the loans.

On Page 5, again, kind of a repetition, but it's important, very solid liquidity management that has resulted in the strong deposit growth, both year-on-year and year-to-date basis. This has been driven by demand deposits and individual deposits, specifically. We are lowering the share, we are continuously lowering the share of big tickets in the portfolio with a positive effect on the cost of funding evolution.

The share of demand deposit increased as much as 5 percentage points, reaching the level of 22% year-on-year, mainly driven by small tickets again, and we have been gaining 193 basis points in market share in TL individual demand deposit in 1 year, which is, again, a very remarkable commercial result.

As of 9 months, 2019, we have already better than our guidance or targeted LDR level, which is in the range of 100%, 105%, with very strong liquidity represented by 176% LCR and FX LCR at the level of close to 440%. We have further increased our FX liquidity to USD 12 billion and the run-off in the next 1 year is just USD 4.3 billion. As a note here, but it's important, we have successfully rolled over our syndication recently with the highest number of participants in the second half of 2019 within the Turkish market.

Moving to Page 6. We generated overall TRY 14.5 billion revenues in 9 months, and our revenues increased 16% year-on-year if you deduct the effect of the CPI impact. And this is thanks to consistent improvement in commercial core revenues, which accounts for both net interest income and fees. The core revenue margin further improved 36 basis points over 2019 to a level of 4.8% on 9 months cumulative, again, excluding the effect of the CPI linkers.

Now I would like to move to Page 7. On the 9-month basis, our net interest margin has realized 3.4%. The NIM came down by 66 basis points compared to 2018, again, due to the linkers. Excluding this effect, the net interest margin has been widening by 20 basis points, thanks to a 37 basis point support from loan-to-deposit spread, including swap cost, which is again the results of the effective commercial activity, mostly driven by the loan yields.

Looking at the quarterly development. Net interest margin is positively impacted, again, thanks to core performance, with an improvement of 34 basis points. Due to the increased level of liquidity, we have observed temporary negative impact coming from bank placement. And on a monthly basis, also, September exit rate is quite strong at 3.6%, with substantially cost of funding driven.

When you look at the monthly evolution on the chart which is represented on the bottom left, this chart shows that we have already started Q4 with a 20 basis point higher level, which is, as of today, even higher, and that's quite promising for the fourth quarter.

Moving to Page 8. Loan-to-deposit spread improved 65 basis points over the second quarter 2019. We had a successful execution of, again, our small ticket strategy and the timely loan growth with the environmental tailwind. The funding cost was the main driver of the improvement, which came down as much as 80 basis points, thanks to better or more effective cost of funding management, again, supported by the composition change towards small tickets and retail.

In spite of the competition in lending, which has been intensifying, we managed to maintain our TL loan yield, thanks to the activity that was done at the beginning of the year. So thanks to our front-loaded loan growth in the first half of 2019.

Page 9, you can find the details of our -- one of our strengths, which is the fee generation. Fees increased as much as 26% year-on-year. With an acceleration in the last quarter, so in the third quarter, with a growth of 7%, which is higher than our guidance, which stands in the mid-teens for the full year, which is creating, obviously, an upside for the full year.

We have achieved this strong growth or strong contribution from mostly payment system, and as well as ongoing pricing in the noncash loans. But also money transfer contribution increased, thanks to the support of -- continued support of bancassurance. We target to continue supporting our fees in the coming periods, thanks to the renewed service model that was introduced in the summer. Of course, I don't want to go into more details, but we are very happy to provide them in case there are questions on the Q&A session.

Page 10, cost. The cost is well under control. The growth is 13%, which is significantly below the average inflation of 17%. It is likely to -- that this would be also the level towards the end of this year. The quarterly development also confirm our strong efficiency. Cost income has realized 36.5%, which is nominally 2.3 percentage points higher than end of 2018. But the main reason of that delta is, again, the dynamic on the contribution of the CPI linkers, which was sustained in 2018. So when we neutralized that effect, the cost income, we observed an improvement of 2.9 percentage points.

Page 11. Obviously, part of these results on the efficiency is due to our very strong performance on digitalization. We reached the level of 6.1 million digital customers with 600,000 additions in just the first 9 months of this year. And which is also more remarkable. Recently, we have been able to add on a monthly basis new digital customer at a speed that is 2x the speed of the first quarter of this year. So not only this is important for the efficiency, but the contribution of the digital effort is increasing. The digital transactions have been increasing 16% versus 11% contraction through the branches, which has obviously supporting the cost efficiency of the bank.

Moving to Page 12, adding a bit more details on the asset quality. Cost of risk was stable versus year-end and mainly driven by stage 3 inflows. As of 9 months of 2019, our cost of risk level was at 2.53%, converging towards the edge of the guided level of 300 basis points. On a quarterly basis, the cost of risk is increasing by 36 basis points, which is driven mainly by new flow to stage 2 and stage 3. Our results are in line, as already mentioned by our CEO, with the current ongoing discussion with BRSA. And eventually, more detail will be provided later.

Moving to Page 13. We know that we have a strong coverage, which has been maintained, together with the ongoing restructuring effort, which is visible in this page, when we see that the provision per gross loan is at the level of 6.7%, which is the highest among peers up to now. We have already built a provision for potential deterioration in the asset quality in the next future.

In the quarter, we have witnessed a significant increase in restructuring loans, which is already classified in stage 2 through quite a strong coverage. With regards to stage 3 ratio, this has been increasing to 6.9%. Here, you will see that our NPL coverage is realized at 63% due to a combination of 2 effects, NPL sales and newly added file with strong collaterals. We've been classifying around TRY 2.5 billion on stage 3 and booked provision for a level approximately equal to 50%, mostly related to energy files.

Moving to Page 14. Again, already mentioned before, but it's important on capital. We continue to generate internal capital in the third quarter as well. As a result, the CET1 ratio further improved to 12.5%, significantly higher than the regulatory threshold as well as our targeted minimum level. Tier 1 ratio stood at 13.6% when the CAR is as strong as 16.7%. And as mentioned before by Gökhan, as of today, we are even seeing some further increase in the capital ratio.

And so the last page, I give back the floor to Mr. Gökhan.

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Gökhan Erün, Yapi ve Kredi Bankasi A.S. - CEO & Executive Director [4]

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Thank you. Thank you, Marco. So regarding to our 2019 guidance. Most important development is at, I think, asset quality. Before going to asset quality details, with respect to BRSA regular financial health report, let me summarize the other guidance details.

First, we are at comfortable position regarding our fundamentals, LDR is lower than our 105% guidance. Cash is around 170 basis points higher than our guided threshold, given we are very close to 200 basis points, as we speak, so which is 17%.

In terms of volumes, we will be closing the year for both TL loans and total deposit growth at double-digit. So we can confirm. Revenue generation has an upside potential for both NIM and also fee growth. Our NIM will widen compared to last year, where we guided to be flat. Also for fee growth, we're expecting to have growth around 25% increase versus our mid-teens growth targets.

Lastly, we will comfortably beat our cost growth guidance, which was to be lower than the average inflation.

With respect to impacts of the BRSA's regular financial health report, we have largely classified the files that we expected either in the first half or in the third quarter of this year. We will be provisioning for the remaining stage 3 classification as well as some further precautionary provisioning increases within stage 2 in the last quarter of this year after the finalization of the regular process with BRSA.

Just to add also, files to be classified to stage 3 have important amounts of provisions already in stage 2. Based on our plan, full year cost of risk is likely to be slightly higher than our guidance threshold of 300 basis points. Also, the NPL ratio may be higher than the guided threshold.

Very important to mention that thanks to our strong pre-provision profit generation with further upsides, the capital impact will be insignificant. All incorporated, we do not foresee any material impact on our ROTE guidance of low teens.

As closing remarks, if I may summarize from year-to-date 2019 performance, we gained market share for the segments where we would like to improve, such as Turkish lira loans, individual time and time deposits and demand deposits, in line with our small ticket strategy. Especially after the redesign of our service model, we have further improved our demand deposit generation in the third quarter. Our TL individual demand deposit market share gain was 193 basis points, almost 200 basis points to 200 percentages just in a year.

We keep prioritizing liquidity and LDR, which was well supported by our execution of small ticket strategy as well. We improved our TL loan-to-deposit spread by 65 basis points in the quarter, thanks to [adequate] cost of funding and also front-loaded TL loan growth coming from the first half. We continue to well manage also the cost structure and had 13% year-on-year growth, lower than the average inflation.

Last but not least, we sustained prudent and precautious provisioning actions on asset quality with a conservative risk appetite. Going forward, we'll ensure the continuation of this performance while maintaining, of course, our strong fundamentals, driven by customer-centric approach, responsible growth and sustainable revenue generation through valuated services and increased transactional banking.

We have strong brands, rich organizational culture, fully committed workforce and support of our both shareholders, controlling and UniCredit. We'll seize the opportunities ahead of us and reach to greater achievements, which will also contribute to our country's economy.

I'd like to thank on this occasion -- take the occasion to extend my thanks to our stakeholders who stand by us with trust and support and to our dedicated employees who contributed to the achievements of our bank. On behalf of our whole team, I would like to thank you for joining us. And now we can take your questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) The first question comes from Gabor Kemeny from Autonomous Research.

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Gabor Zoltan Kemeny, Autonomous Research LLP - Research Analyst [2]

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A couple of questions on credit quality. In the stage 2 loans, you show a significant increase in the restructured exposures, it went from 21% in the second quarter to 45% in the third quarter. Can you give us some color on what drove this increase? And what's the likelihood that we will see migration from here to the stage 3 exposures? And can you give us a flavor on how much normalization would you expect in provisioning going into 2020?

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Marco Iannaccone, Yapi ve Kredi Bankasi A.S. - COO & Executive Director [3]

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First of all, yes, there is an increase on the stage 2, which is -- yes, which is actually the results of my comment that I made when I was talking about the asset quality on the restructuring. Then do we expect a significant migration from stage 2 to stage 3, not necessarily. We will see, in any case, the level of the stage 3 after the discussion that we are having at the moment.

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Gökhan Erün, Yapi ve Kredi Bankasi A.S. - CEO & Executive Director [4]

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Yes. And the part that we restructured, we are very confident in terms of the structure that we put [aside]. So we are confident that it will work for our clients. And for 2020 normalization, so are we giving guidance yet or not?

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Marco Iannaccone, Yapi ve Kredi Bankasi A.S. - COO & Executive Director [5]

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No.

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Gökhan Erün, Yapi ve Kredi Bankasi A.S. - CEO & Executive Director [6]

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Not yet.

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Massimo Francese, Yapi ve Kredi Bankasi A.S. - Assistant GM of Financial Planning & Administration and CFO [7]

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For 2020, we don't call it as a normalization of the cost office, which we believe can be in 2021. As when we have more color for our 2020 budget, we will be announcing all to you.

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Gabor Zoltan Kemeny, Autonomous Research LLP - Research Analyst [8]

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Okay. And just a quick follow-up on your coverage ratios, please. You show on Page 22 in the presentation that a bit divergent coverage ratios in the energy and infrastructure, the files. You have a much higher coverage in the infrastructure -- on the infrastructure exposures in stage 3. But in stage 2, actually it's the other way around, your coverage is much higher in stage 2. Do you think we will see a convergence here? And can you give us some color what drives these differences in -- between the segments?

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Massimo Francese, Yapi ve Kredi Bankasi A.S. - Assistant GM of Financial Planning & Administration and CFO [9]

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Between these 2 segments, the main differentiation on stage 3 coverage is, as you may guess, the collateralization and the level of the expected cash flow of the loan. Therefore, we cannot say generically [building] for the differentiation between the sector, but it is totally related to customers itself. But we don't see a convergence from energy coverage to close to infrastructure coverage, and these are the levels that we believe it should be.

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Operator [10]

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(Operator Instructions) The next question comes from Alan Webborn from SocGen.

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Alan Ramsey Webborn, Societe Generale Cross Asset Research - Equity Analyst [11]

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Can you talk us through a little bit about your sort of marginal loan yields and deposit costs and where the stock is and how you think things will progress in terms of core spreads, given the current level of interest rates? And how you feel about the sort of competitive environment, as I think, clearly, there's going to be a fair amount more loan growth in Q4 in the system than we've seen in the previous 3 quarters of the year or certainly in recent quarters. So if you could give us a little bit of flavor about how you feel the trends have been across Q3 and where you can see them currently, that would be helpful.

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Gökhan Erün, Yapi ve Kredi Bankasi A.S. - CEO & Executive Director [12]

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So let me start from the NIM, saying that the performance so far is better than expectation. And due to the exit of the quarter, we expect a further improvement in the last quarter, delivering a NIM, excluding the CPI linkers impact, better than the previous year in the range of 20, 30 bps. When you consider the TL time deposit, in September, our stock was around 15%. But then we have seen a significant reduction. And today, it's already well below 14%. And when you see that the new flows, that we are in the range of 12% to 12.5%... In terms of loans -- loan yields, once again, in September, our portfolio was at around 20.5%. Also in this case, we have seen a reduction. Today, we are slightly below 20%, and the new inflows are in the range of 16%.

Regarding our year-end TL loan growth, we expect to be able to close the year at double-digits. Yes, and maybe about the environment, I should say that the competition, even from the private banks also started, that at least last year, definitely, we didn't see it. And even this year, first half, we didn't see that the private banks were aggressive on TL loan growth. But especially starting from 1st of September, we are seeing that almost all the private banks are aggressive in terms of TL loan growth. This is the operating environment for us. And this is also opportunity eating up some part of our margins. This is also true. But on the other hand, the TL deposit funding, especially the flow, is going down to 12% levels at the moment. So we are very much benefiting out of that.

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Operator [13]

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The next question comes from Simon Nellis from Citi.

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Simon Nellis, Citigroup Inc, Research Division - MD and Director [14]

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Just on the fee income side, I was just wondering if you could outline the impact of this new regulation, capping, merchant fees. And what does that mean for fee income growth next year?

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Gökhan Erün, Yapi ve Kredi Bankasi A.S. - CEO & Executive Director [15]

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So yes, starting from 1st of November, as you know, that the new cap is being applied on acquiring business in payment systems. And there are more than one parameter -- it's not only one parameter, unfortunately there are that are more than one parameter that impacts the revenue generation on our side. And definitely, we will be optimizing, of course, the impact by also revisiting some of the parameters. And very preliminary, net impact is around 10% to 15% on our payment systems revenues. As mentioned, it is very preliminary at the moment as we are still waiting for further interpretation from the regulators on some details. But we can give you more color during our 2020 budget meetings.

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Operator [16]

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(Operator Instructions) There are no further questions in the call by phone, I will now give back the floor to the company for the webcast questions.

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Hilal Varol, Yapi ve Kredi Bankasi A.S. - Head of IR and Strategic Analysis [17]

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So we have some questions from the web as well. So given the challenges the banking sector has experienced in recent years, do you think we could see further consolidation in the sector in the medium term?

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Marco Iannaccone, Yapi ve Kredi Bankasi A.S. - COO & Executive Director [18]

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Well, actually, if you look at what's going on, normally, it should have happened maybe starting from last year. So a consolidation, especially looking at the margins that are deteriorating and also looking at our cost base, I think a consolidation with our existing business models is inevitable. And in the midterm, for sure, we'll be seeing some consolidation to gain from the synergies. So this is what I expect in the midterm for sure for many business segments, bank size as well, because the business model for many are not working at the moment. The only income from treasury will not help to anyone.

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Hilal Varol, Yapi ve Kredi Bankasi A.S. - Head of IR and Strategic Analysis [19]

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So we have one more question on the web. Can you please remind us what the impact of 1 percentage point drop in inflation is on your NIM, revenues and net income?

So 1 percentage point drop in inflation has around TRY 250 million on revenues. That's around 5 basis points on our net interest margin. This is the growth impact, I'm sure you can calculate the net income impact.

And one is about asset quality. Can you give some more details on potential impact of classification of loans, highlighted by the BRSA on your NPL ratio and coverage?

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Massimo Francese, Yapi ve Kredi Bankasi A.S. - Assistant GM of Financial Planning & Administration and CFO [20]

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During the presentation of the guidance page, we have informed that we have largely classified the price that we expect it to be. And with the classification in the fourth quarter as well as further increase on stage 2 coverages, we expect to be slightly higher than cost of risk guidance threshold of 300 basis points. And also, we expect the have NPL ratio may be higher than the guided threshold without any impact on ROTE guidance, and this has a very insignificant impact on capital.

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Hilal Varol, Yapi ve Kredi Bankasi A.S. - Head of IR and Strategic Analysis [21]

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So the last question is, can you give an update on your UniCredit exposure to Yapi Kredi intragroup? Do you expect to continue to repay?

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Marco Iannaccone, Yapi ve Kredi Bankasi A.S. - COO & Executive Director [22]

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So as we already mentioned in the previous calls, at the moment, the outstanding of intragroup funding from UniCredit to Yapi Kredi is approximately...

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Hilal Varol, Yapi ve Kredi Bankasi A.S. - Head of IR and Strategic Analysis [23]

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[EUR 1.28 billion].

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Marco Iannaccone, Yapi ve Kredi Bankasi A.S. - COO & Executive Director [24]

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EUR 1.69 billion. And do we expect this to be continuously repaid? As our group CEO, UniCredit Group CEO has mentioned, there is a strategy of reduction -- progressive reduction of the intragroup funding, and this will remain. So the loans will be repaid according to the plan.

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Hilal Varol, Yapi ve Kredi Bankasi A.S. - Head of IR and Strategic Analysis [25]

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So could you have looked to return to the bond market to replace [the loans] repaid?

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Massimo Francese, Yapi ve Kredi Bankasi A.S. - Assistant GM of Financial Planning & Administration and CFO [26]

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And just to note, we repaid our senior in October. It was not a sub-loan. And also, we have front-loaded this issuance in March '19. For the possible issuance in the market, we will be opportunistic on that, and when we see the market opportunity, for sure, we will see, but it is not in our plan this year now.

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Hilal Varol, Yapi ve Kredi Bankasi A.S. - Head of IR and Strategic Analysis [27]

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I think we don't have any further questions from web or from the audio. So thank you very much for participating in our call.

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Gökhan Erün, Yapi ve Kredi Bankasi A.S. - CEO & Executive Director [28]

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Thank you.

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Marco Iannaccone, Yapi ve Kredi Bankasi A.S. - COO & Executive Director [29]

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Thank you.

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Massimo Francese, Yapi ve Kredi Bankasi A.S. - Assistant GM of Financial Planning & Administration and CFO [30]

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Thank you.

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Operator [31]

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Ladies and gentlemen, this concludes today's webcast call. Thank you for your participation. You may now disconnect.