Turkey’s Akbank sells €180mn NPL portfolio for €10mn

By bne IntelliNews June 14, 2017

Akbank, one of Turkey’s largest private lenders, has sold a non-performing loans (NPL) portfolio worth TRY709mn (€180mn) to Istanbul Varlik Yonetim, Efes Varlik Yonetim, Hayat Varlik Yonetim and Final Varlik Yonetim for TRY39mn, a sum that corresponds to a recovery rate of 5.5%, the lender said on June 14 in a bourse filing.

Akbank's share price was up 0.20% d/d to TRY9.82 as of 15:00 on June 14, while the benchmark BIST-100 was up 0.51% to 99,809.

In April last year, Akbank sold an NPL portfolio worth TRY450.1mn worth to Guven Varlik Yonetim for TRY49.1mn, a figure equating to a recovery rate of 10.9%.

Akbank’s consolidated loan book grew by 17% y/y to TRY179bn at end-2016. Its share of NPLs in total loans stood at 2.39% having been recorded at 2.20% at end-2015 while the gross NPL portfolio had expanded by 26% y/y to TRY4.27bn at end-2016, following a 45% annual increase registered in 2015.

The bank is targeting 10-12% y/y loan growth in 2017. The target is in accordance with its loan growth forecast of 10-12% for the Turkish banking industry.

On June 9, Fitch Rating Services affirmed Akbank’s long-term foreign currency and local currency Issuer Default Ratings (IDR) at ‘BB+’ with a stable outlook.

The NPL/total loans ratio of the Turkish banking industry very slightly edged down from 3.32% at end-March to 3.31% at end-April, according to the latest data from banking watchdog BDDK.

Last month, Moody’s Investor Services cautioned that the challenging macro environment may drive problem loans to above 4% over the next 12-18 months from 3.2% at end-2016.

Akbank Financials (consolidated)
(bn TRY) 2014 2015 14/15 2016 15/16
Total Assets 219 252 15% 295 17%
Deposits 122 149 22% 174 16%
Cash Loans 136 153 13% 179 17%
NPL 2.33 3.37 45% 4.27 26%
NPL Ratio 1.71% 2.20% 0.005 2.39% 0.002
Branches 991 902 -89 841 -61
Capital Adequacy 14.89% 14.46% -0.004 14.16% -0.003
(mn TRY) 2014 2015 14/15 2016 15/16
Net Interest Income 7,220 7,589 7% 8,490 12%
Net Fee & Commissions 2,437 2,487 2% 2,569 3%
Net Income 3,379 3,229 -4% 4,854 50%
source: kap
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