Bloomberg News

Yapi Kredi Drops in Istanbul on UniCredit Losing Streak

January 09, 2012

(Updates with closing share price.)

Jan. 9 (Bloomberg) -- Yapi & Kredi Bankasi AS, a joint venture between UniCredit SpA and Koc Holding AS, fell to the lowest level since July 2009 after its Italian parent slumped for the fifth day in Milan.

Yapi Kredi dropped 2.3 percent to 2.55 liras at the close in Istanbul, declining for the fourth day, its longest losing streak since Nov. 24.

UniCredit plunged as much as 16 percent in Italian trading, taking losses for the past week to 48 percent. The bank announced last week that it would sell shares at a 43 percent discount, excluding the value of rights. The lender is trying to cut jobs and strengthen finances after posting a third-quarter loss of 10.6 billion euros ($13.5 billion).

The sell-off in Yapi Kredi shares is “unwarranted” as there’s “no organic tie between UniCredit’s capital increase and Yapi Kredi shares,” according to Bulent Sengonul, an analyst at Is Investment Securities in Istanbul. UniCredit will eventually be recapitalized and the impact on Yapi Kredi “is being felt in the market share price, but not in the bank itself,” he said.

The plunge comes as banks face a tougher 2012 in which margins are likely to fall, non-performing loans increase and deposit growth slow, according to Yavuz Uzay, head of Turkey research at Renaissance Capital in London. “Yapi Kredi is better off compared with the sector,” he said, though “overall the Turkish banks story still involves risks.”

Yapi Kredi shares have plunged 51 percent in the past year, compared with a 28 percent drop for the ISE National 100 index.

--Editors: Peter Branton, Tim Farrand

To contact the reporter on this story: Benjamin Harvey in Istanbul at bharvey11@bloomberg.net

To contact the editor responsible for this story: Mark Bentley at mbentley3@bloomberg.net


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