UPDATE 1-Yapi Kredi's Q3 net falls to 276.5 million lira
* Q3 profit worse than expected
* Banks to expand network in 2010
ISTANBUL, Nov 11 (Reuters) - Yapi Kredi (YKBNK.IS), the Turkish bank owned by Koc Holding (KCHOL.IS) and Italy's UniCredit SpA (CRDI.MI), said on Wednesday its third-quarter net profit fell 3 percent to 276.5 million lira ($188 million).
A Reuters poll forecast 331 million lira unconsolidated third-quarter net profit. The bank's nine-month unconsolidated net profit was 1.282 billion lira.
Yapi Kredi was expected to post a 16 percent rise in third-quarter profit, less than peers, after making more provisions to cover non-performing loans in the slowdown.
In the first six months of the year, the lender set aside provisions to cover 68 percent of its bad loans, worth 2.3 billion lira, or 6 percent of its total loanbook.
Yapi Kredi has been especially hard hit by non-performing loans because it is the biggest issuer of credit cards, often the first debt households and small businesses default on when in economic distress.
Yapi Kredi, like its peers, remains profitable because of reduced funding costs following the run of interest rate cuts since last November. The central bank has cut its benchmark rate by 10 percentage points to a record low of 6.75 percent to stimulate the economy.
The bank said on Wednesday it would expand its network in 2010.
"We are starting opening new branches with 10 branches in the fourth quarter. We will open 60 new branches in 2010," the bank's chief executive Faik Acikalin said in a statement.
Private banks have, in turn, slashed what they pay on deposits, while keeping interest high on loans which have longer maturities.
(Writing by Ayla Jean Yackley)
((ayla.yackley@reuters.com; +90 212 350 7053; Reuters Messaging: ayla.yackley.reuters.com@reuters.net)) Keywords: YAPIKREDI/RESULT
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