Procredit Holding Ag · XETR:PCZ
Procredit — Q3 2020 Earnings Presentation
41 slides from Procredit's earnings presentation, Nov 12, 2020
Slide 1: Q3 2020 results
Dr Gabriel Schor, Member of the Management Board Christian Dagrosa, Manager Q3 2020 results Frankfurt am Main, November 2020
Slide 2: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q3 2020 results | Frankfurt am Main, 12 November 2020 1
Slide 3: ProCredit in the current market environment
ProCredit in the current market environment Steady Q3 results with continued strong loan growth ► Further strengthening market position while maintaining high lending standards Customer loans Q3 growth of 3.0%, in line with expectations (YTD 8.5%) Customer deposits Q3 growth of 6.1%, achieved th
Slide 4: ProCredit in the current market environment (continued)
ProCredit in the current market environment (continued) Focused and long-term oriented business model of ProCredit continues to provide positive outlook ► “Hausbank” for SME concept with close client relationships as catalyst to supporting the economy Update Q3: Continued strong customer growth in
Slide 5: Key recent developments and outlook for our countries of operations
Key recent developments and outlook for our countries of operations Overview of regional presence in SEE/EE COVID-19 pandemic and governmental response ► The state of emergency and lockdown measures have been largely cancelled since end of May/early June; borders are mostly re-opened ► The initial
Slide 6: Portfolio and credit risk update
Portfolio and credit risk update Update ► Portfolio in moratorium below EUR 250m as of October 1 2020 Strong individual client approach to credit risk management with particular focus on more affected sectors ► Increase in Stage 2 portfolio in line with expectations; continued strong coverage of 9
Slide 7: Steady development in customer loans
Steady development in customer loans Loan portfolio growth in Q3 2020 ► Continued strong growth in customer loans (YTD EUR 408m/8.5%; Q3 EUR 153m/3.0%) +3.0% 79 Steady demand for loans in Q3 75 All Q3 growth was driven by investment and green loans -1 Positive impact on growth from moratoria;
Slide 8: Good deposit development through digital banking channels
Good deposit development through digital banking channels ► YOY increase of EUR 575m (+14%) Deposits by product Achieved mostly through growth in business but also private client deposits 4,718 4,143 Increased share of sight deposits and FlexSave 3,636 1,551 (up 4pp YoY to 67.5%), with positive
Slide 9: 9M 2020 results versus guidance
9M 2020 results versus guidance Guidance Actual FY 2020 9M 2020 (1) ► Growth of the loan portfolio 8% – 10% 8.5% (2) ► Return on average equity (RoAE) positive, but lower compared to FY 2019 5.6% ► Cost-income ratio (CIR) c 70% 66.5% ► CET1 ratio > 13% 14.1% Dividend accrual ► Dividend payout ratio
Slide 10: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q3 2020 results | Frankfurt am Main, 12 November 2020 9
Slide 11: Q3 2020 results at a glance
Q3 2020 results at a glance In EUR m Q3-2019 Q3-2020 9M-2019 9M-2020 y-o-y Net interest income 51.0 50.8 143.6 150.7 7.1 Provision expenses -1.7 5.4 2.4 21.1 18.7 Net fee and commission income 13.1 12.1 38.9 34.7 -4.2 Net result of other operating income 2.4 0.6 2.0 2.6 0.6 Operating income 68.1 58.
Slide 12: Net interest income
Net interest income ► In Q3-20, net interest income up 3.7% compared to Q2-20, with net interest margin stabilizing at 2.9% 3.2% 3.1% 3.1% 2.9% 2.9% Majority of banks with stable or positive trend in NIM 51.0 50.9 50.9 50.8 Portfolio growth during pandemic more focused on upper 49.0 medium busin
Slide 13: Provisioning expenses
Provisioning expenses ► Q3-20 loan loss provisioning expenses below previous 71 bps quarters, supported by continued low level of default 57 bps Quarterly increase in Stage 1 provisions (EUR 1.2m) driven primarily by portfolio growth 42 bps Increase in Stage 2 provisions (EUR 5.5m) as result of
Slide 14: Net fee and commission income
Net fee and commission income ► Q3-20 net fee and commission income significantly increased by +14% QoQ (EUR 1.5m) 13.1 13.1 12.0 Number and volume of transactions visibly recovered 10.6 12.1 from the subdued level of Q2 Fee income from account maintenance fee slightly above Q2 mainly driven by
Slide 15: Operating expenses
Operating expenses ► Cost-income ratio improved to 66.7% mainly related to 76.6% increased operating income at almost stable expenses 64.6% 68.5% 66.7% 64.2% Increased operating income, although Q2 negatively 21.2 affected by one-time recognition of Bulgarian deposit insurance 20.3 20.6 20.7 20.7
Slide 16: Contribution of segments to group net income
Contribution of segments to group net income Group functions, e.g. risk management, reporting, capital management, IT, liquidity management, training and development Includes ProCredit Holding, Quipu, ProCredit Academy Fürth, ProCredit Bank Germany (EUR 53m customer loan portfolio; EUR 266m customer
Slide 17: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q3 2020 results | Frankfurt am Main, 12 November 2020 16
Slide 18: Structure of the loan portfolio
Structure of the loan portfolio Loan portfolio by geographical segments Loan portfolio by sector Investment and other loans Ecuador Germany Housing 1% 1% 5% Moldova 6% Bulgaria Wholesale and 3% 21% retail trade Georgia Other 26% 7% economic activities 20% Ukraine 11% Transportation Serbia and storag
Slide 19: Loan portfolio quality
Loan portfolio quality ► Share of Stage-3 loans further improved compared to Jun-20, reflecting strong overall loan portfolio quality ► Strong coverage of 98.5% Coverage excluding collateral, which generally consists of mortgages, cash and financial guarantees Increase compared to Dec-19 driven
Slide 20: Structure of collateral
Structure of collateral Collateral by type ► Majority of collateral consists of mortgages 20% ► Growing share of financial guarantees mainly as a result of InnovFin and other guarantee programmes provided by the European Investment Fund ► Clear, strict requirements regarding types of acceptable coll
Slide 21: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q3 2020 results | Frankfurt am Main, 12 November 2020 20
Slide 22: Asset reconciliation
Asset reconciliation ProCredit Group | Q3 2020 results | Frankfurt am Main, 12 November 2020 21
Slide 23: Liabilities and equity reconciliation
Liabilities and equity reconciliation Debt securities ProCredit Group | Q3 2020 results | Frankfurt am Main, 12 November 2020 22
Slide 24: Regulatory capital and risk-weighted assets
Regulatory capital and risk-weighted assets in EUR m Dec-19 Sep-20 ► Capital ratios broadly stable compared to YE 2019 and well above capital requirements (8.2% for CET1 capital, 10.1% CET1 capital 742 723 for T1 capital and 12.6% for total capital) Additional Tier 1 capital 0 0 ► Interim profits f
Slide 25: Development of CET1 capital ratio (fully loaded)
Development of CET1 capital ratio (fully loaded) ProCredit Group | Q3 2020 results | Frankfurt am Main, 12 November 2020 24
Slide 26: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q3 2020 results | Frankfurt am Main, 12 November 2020 25
Slide 27: Q&A ProCredit Bank Georgia
Q&A ProCredit Bank Georgia ProCredit Group | Q3 2020 results | Frankfurt am Main, 12 November 2020 26
Slide 28: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q3 2020 results | Frankfurt am Main, 12 November 2020 27
Slide 29: ProCredit – A unique approach to banking
ProCredit – A unique approach to banking Summary Key figures 9M 2020 and FY 2019 ► A profitable, development-oriented commercial group of banks for Total assets Customer loan portfolio Deposit/loan(1) SMEs with a focus on South Eastern Europe and Eastern Europe EUR 7,147m EUR 5,205m 91% ► Headquarte
Slide 30: Overview of quarterly financial development
Overview of quarterly financial development In EUR m Q3-2019 Q4-2019 Q1-2020 Q2-2020 Q3-2020 Net interest income 51.0 50.9 50.9 49.0 50.8 Provision expenses -1.7 -5.7 6.9 8.8 5.4 Net fee and commission income 13.1 13.1 12.0 10.6 12.1 Net result of other operating income 2.4 0.7 1.8 0.3 0.6 Operating
Slide 31: Segment South Eastern Europe
Segment South Eastern Europe Regional loan portfolio breakdown Key financial data Bosnia (in EUR m) 9M 2019 9M 2020 Albania 6% 6% Net interest income 83.0 86.2 Bulgaria Romania 29% Provision expenses 1.8 9.7 9% Net fee and commission income 27.0 24.0 Net result of other operating -2.5 -0.1 North inc
Slide 32: Segment Eastern Europe
Segment Eastern Europe Regional loan portfolio breakdown Key financial data Moldova (in EUR m) 9M 2019 9M 2020 14% Net interest income 48.3 47.8 Provision expenses 1.9 8.0 Net fee and commission income 7.2 6.4 Net result of other operating income 3.8 4.3 Ukraine Operating income 57.4 50.4 54% Georgi
Slide 33: Segment South America
Segment South America Regional loan portfolio breakdown Key financial data (in EUR m) 9M 2019 9M 2020 Net interest income 12.2 13.8 Provision expenses -1.2 3.0 Net fee and commission income -0.4 -0.3 Net result of other operating income -0.8 -0.5 Ecuador 100% Operating income 12.1 10.1 Operating exp
Slide 34: Development of green loan portfolio
Development of green loan portfolio Green loan portfolio growth ► Continued strong growth of green loan portfolio during Q3- 9.1% 12.6% 15.4% 16.6% 18.3% 20 by 9.1% in volume 954 ► Includes financing of investments in: 18 795 678 17 • Energy efficiency 15 489 • Renewable energies 14 936 331 779 • Ot
Slide 35: Structure of the loan portfolio (continued)
Structure of the loan portfolio (continued) Loan portfolio by exposure Loan portfolio by currency 8% 32% 35% 20% 55% 14% 10% 26% EUR USD Other currencies < 50k 50-250k 250-500k 500k-1.5m >1.5m Notes: Loan portfolio by exposure and by currency in % of gross loan portfolio(EUR 5,205m as per 30-Septemb
Slide 36: Funding and rating
Funding and rating Funding sources overview 5% 1% 1% 3% ► Highly diversified funding structure and counterparties ► Customer deposits main funding source, accounting for 74%, 16% Customer deposits supplemented by long-term funding from IFIs and Liabilities to IFIs institutional investors Liabilities
Slide 37: Liquidity update
Liquidity update Liquidity coverage ratio 186% 175% ► Increase of HLAs driven by strong deposit growth and 149% additional IFI funding 100% 100% 100% ► No visible deterioration of liquidity since the outbreak of COVID-19 pandemic. The limited negative impact on cash-flows from moratoria on loans has
Slide 38: Balance sheet
Balance sheet in EUR m Sep-20 Dec-19 Assets Cash and central bank balances 1,267 1,082 Loans and advances to banks 224 321 Investment securities 344 378 Loans and advances to customers 5,205 4,797 Loss allowance for loans to customers -120 -106 Derivative financial assets 2 0 Property, plant and equ
Slide 39: Income statement by segment
Income statement by segment 01.01.- 30.09.2020 South Eastern Germany Eastern Europe South America Consolidation Group (in EUR m) Europe Interest and similar income 17.3 94.3 108.4 23.4 -15.9 227.5 of which inter-segment 16.0 0.1 -0.2 0.0 0.0 0.0 Interest and similar expenses 16.2 46.5 22.2 9.6 -17.7
Slide 40: Contact Investor Relations
Contact Investor Relations Contact details Financial calendar (continuously updated on IR Website) Investor Relations Date Place Event information ProCredit Holding AG & Co. KGaA Deutsche Börse 16. - 17.11.2020 virtual Investor Relations Team Deutsches Eigenkapitalforum Online 2020 10.12.2020 virtua
Slide 41: Disclaimer
Disclaimer The material in this presentation and further supporting This presentation and further supporting documents may contain documents have been prepared by ProCredit Holding AG & Co. forward-looking statements including statements regarding our KGaA, Frankfurt am Main, Federal Republic of Ger