On 8 November a
number of banks in Turkey 30
September 2012 . The headlines
were all positive, but the actual facts were far from impressive (1 EUR =
2.2770 TRY at time of writing):
Akbank T.A.Ş.: “Akbank makes profit of 2.4 billion TRY”. The figure represents the bank’s consolidated
net operating income (before taxes) for the first nine months of 2012. For Jan.-Sept. 2012 the consolidated net
operating income (sürdürülen faaliyetler vergi öncesi k/z) was indeed 2.470 bln
TRY, but for the same period in the year earlier the profit had been 2.477 bln
TRY. Given that inflation in Turkey
The biggest change from 2011 on the income side was in interest on loans
(3.779 bln → 5.322 bln), while on the expense side the biggest change was in interest
on deposits (2.896 bln → 3.730 bln). These
two increases are explained by the fact that the bank’s total loans (krediler
ve alacaklar) in TRY increased by 34.9% in the first nine months of 2012
(42.000 bln → 56.667 bln).
Non-performing loans (takipteki krediler) also increased, from 1.263 bln
(1.74%) at 31 Dec. 2011 to 1.416 bln
(1.63%) at 30 Sept. 2012 .
Sources:
Akbank 3Q 2012
Financials spreadsheet: Finansal
Bilgiler 2012 - 2012 Konsolide - 3. Çeyrek - Finansal Bilgiler
Akbank 3Q 2012
Press release: Akbank
2012'nin ilk dokuz ayında 1 milyar 907 milyon TL net kâr elde etti
Akbank 3Q 2012 Consolidated
financial statements (audited by Ernst & Young): Denetim
Raporu
VakifBank (Türkiye Vakıflar Bankası T.A.O.): “Vakifbank makes net profit
of 1 billion TRY”. Here the figure in
question is the bank’s consolidated net (after-tax) profit for the 9-month
period. In its announcement VakifBank
tries to put a rosy face on its results for the first nine months of 2012,
pointing out that the bank had opened 61 new branches and created many jobs,
but as with Akbank the bare financial result is far from noteworthy.
Comparing VakifBank’s audited financial statements for 3Q 2012 with data
from previous years we note the following (all figures in millions of TRY):
Net Profit/Loss from Continuing Operations (Sürdürülen faalġyetler dönem
net k/z):
1Q-3Q 2012: 1,009.348
1Q-3Q 2011: 965.135
1Q-3Q 2010: 764.544
3Q 2012: 305.189
3Q 2011: 316.093
3Q 2010: 224.857
While it is true that the figure of 1.009 billion TRY does represent an
increase of 4.58% over the result for the year-earlier period, according to official inflation
statistics published by the Central Bank of the Republic of Turkey the
consumer price index in Turkey over the same 12-month period between Sept. 2011
and Sept. 2012 rose by no less than 9.19%.
So the y-o-y earnings results did not even keep pace with inflation.
The situation is even less impressive if the third quarter is considered
alone: earnings for 3Q 2012 were 3.45% less than earnings in the
year-earlier period, even before taking inflation into account.
Aside from earnings, VakifBank also seems to be struggling with
non-performing loans:
Provision for Non-Performing Loans and Other Receivables (Kredi ve diğer
alacaklar değer düşüş karşiliği)
1Q-3Q 2012: 839.727
1Q-3Q 2011: 608.832
1Q-3Q 2010: 740.440
The notes to the bank’s financial statements reveal that
of the 230.895 mln TRY increase in provision for non-performing loans between
1Q-3Q 2011 and the same period in 2012, a total of 61.495 mln of this came from
loans classified as Group III recovery class (51.794 → 113.289 mln TRY) and 136.496
mln of it came from Group IV loans (172.908 → 309.404 mln TRY), while the provision
for loans that are considered completely “unrecoverable” – Group V – actually declined
(50.441 → 13.327 mln TRY).
Sources:
VakifBank’s consolidated
financial statements for 3Q 2012: 30
Eylül 2012 - Konsolide Olmayan Finansal Tablolar ve Sınırlı Bağımsız Denetim
Raporu (2012-11-09 12:57:45 )
VakifBank’s interim
report for September 2012: Eylül
2012 Ara Dönem Faaliyet Raporu (2011-11-09 13:00:10 )
Vakifbank results
for 3Q 2011: Eylül
2011 Konsolide Raporlar, tab 3 (“gelir”), line 44
Bank Asya (Asya Katılım Bankası
A.Ş.): “Bank Asya achieves profit of 389 million TRY”. Here the figure in question is claimed to
represent unconsolidated net income for the 9-month period “before
provisions”. (“Bank Asya’nın 2012 yılı
üçüncü çeyrek sonu itibarıyla karşılıklar öncesi kârı, geçen senenin aynı
dönemine göre yüzde 35 oranında artarak 389 milyon TL’ye ulaştı.”) We might suspect that here the management is
trying to distract us from something unpleasant, since there is nothing in the
bank’s income statement that even remotely matches this figure of 389 million
TRY, and the bank’s press release in fact goes on to state that net income
after taxes and loan loss provisions was 154 million TRY. In the bank’s financial statements this would
correspond to the line “Net profit (loss) from continuing operations” (“XVII. Sürdürülen
faaliyetler dönem net k/z”), which in fact amounts to 154,321 thousand TRY for
the 1Q-3Q 2012. Because for the same
9-month period in 2011 the corresponding figure was 164,061 thousand TRY, fully
5.9% higher even before considering inflation, it is clear that the bank’s
management has little to boast about.
As for the figure “389 million”, it would seem to be drawn from the
consolidated statement of cash flows (“Konsolide olmayan nakit akiş tablosu”),
where one does indeed find an entry equivalent to “389 million TRY” under the
heading “Net increase in cash and cash equivalent assets” (“V. Nakit ve nakde
eşdeğer varliklardaki net artiş”), where the figure given is 388,713 thousands
of Turkish lira.
The seeming evasiveness is puzzling, since in general the bank’s
results in Jan.-Sept. 2012 were much better than those in the same period of
2011: net interest income in the 2012 period was 636 million TRY, up from 472 million
in the 2011 period, and as a result net operating income in 1Q-3Q 2012 was 976
million, up from 764 million in the earlier period. But this positive result was largely cancelled
out by a more than doubling in the provision for loan losses and other
receivables (“IX. Kredi ve diğer alacaklar değer düşüş karşiliği”), which grew
from 143 million TRY in 1Q-3Q 2011 to 303 million TRY in 1Q-3Q 2012. This difference came about largely due to a
virtual explosion in the bank’s non-performing loans that are classified as
“uncollectible” (“V. Grup – Zarar niteliğindeki krediler ve diğer alacaklar”),
which more than tripled from 61 million TRY in 1Q-3Q 2011 to 195 million TRY in
1Q-3Q 2012. This intriguing fact was for
some reason omitted from the bank’s press release.
Sources:
Bank Asya interim
report for 3Q 2012 (containing figure of “389 million”): 2012
Faaliyet Raporları - 3. Dönem Solo Faaliyet Raporu
Bank Asya audited
financial statements for 3Q 2012: Denetim
Raporları - 30 Eylül 2012 - Solo Bağımsız Denetim Raporu – BDDK
Mark Pleas
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