Yapi Kredi Mulls Capital Increase as It Chases Higher Growth

Yapi Kredi, the Istanbul-based bank part-owned by UniCredit SpA, said it will consider raising capital as it targets growth in loans exceeding 20 percent next year.

“In the mid-term we would need capital support,” Deputy Chief Executive Officer Carlo Vivaldi said on an earnings conference call late Monday. The bank would weigh a capital increase or a rights issue, and base its decision on whether to proceed on market conditions, he said.

The lender increased its loan book by 26 percent last year, compared with an industry average of 18 percent. Yapi Kredi made investments in staff and infrastructure, increasing its network to more than 1,000 branches.

“Although they have stated that they are not in immediate need of support capital, we think that given above 20 percent loan growth levels and lower internal capital generation due to depressed profitability, it will come to the table sooner or later,” Istanbul-based Tera Brokers said in an e-mailed note. “The possibility of a rights issue may pressure the stock performance.”

Yapi Kredi reported net income of 525 million liras ($216 million) in the fourth quarter, beating the estimates of all nine analysts surveyed by Bloomberg. The stock fell 1 percent to 5.18 liras at 10:27 a.m. in Istanbul trading.

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