Procredit Holding Ag · XETR:PCZ
Procredit — Q1 2022 Earnings Presentation
44 slides from Procredit's earnings presentation, May 12, 2022
Slide 1: Q1 2022 results
Dr Gabriel Schor, Member of the Management Board Christian Dagrosa, Manager Q1 2022 results Frankfurt am Main, May 2022
Slide 2: Agenda
Agenda A Highlights B Group results C Segment performance D Asset quality and capital Q&A Appendix ProCredit Group | Q1 2022 results | Frankfurt am Main, 12 May 2022 1
Slide 3: Highlights Q1 2022
Highlights Q1 2022 Q1 2022 financial result negative due to provisions for Ukrainian operations; rest of group with marked underlying profitability improvements ► Net loss of EUR 1.7m (RoE -0.8%) reflecting strongly increased provisioning of EUR 35.6m above all for operations in Ukraine ► Operating
Slide 4: Continued strong growth in customer loans
Continued strong growth in customer loans Loan portfolio growth ► Q1 2022 customer loan growth of EUR 105m or 1.8%; 1.8% 22 6,029 group loan portfolio above €6bn 72 10 5,924 19% Growth in all loan categories, with stronger demand for working capital loans with maturities < 3 years 44% Loan growt
Slide 5: Good deposit development through digital banking channels
Good deposit development through digital banking channels ► YOY increase of EUR 495m (+9.9%) Deposits by product Achieved mostly through growth in business clients, also private client deposits increasing visibly (+ EUR 175m) 5,517 5,022 Increased share of sight deposits and FlexSave (+2.5pp YOY
Slide 6: 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 ► Steady progress of vaccination roll-out helps curb the impact on the population of increasing infection rates ► Strong economic recovery in 2021/Q
Slide 7: Q1 2022 results versus guidance
Q1 2022 results versus guidance Actual Guidance Q1 2022 FY 2022 c. 10% in many group banks, ► Growth of the loan portfolio 1.8% overall below FY 2021 ► Return on equity (RoE) -0.8% significantly below FY 2021 ► Cost-income ratio (CIR) 59.1% higher than FY 2021 potential for stronger decline, but to
Slide 8: Agenda
Agenda A Highlights B Group results C Segment performance D Asset quality and capital Q&A Appendix ProCredit Group | Q1 2022 results | Frankfurt am Main, 12 May 2022 7
Slide 9: Q1 2022 results at a glance
Q1 2022 results at a glance In EUR m Q1-2021 Q1-2022 y-o-y Net interest income 49.3 60.2 10.9 Net fee and commission income 12.0 12.6 0.7 Other operating income (net) 1.6 4.9 3.3 Operating income 62.8 77.7 14.8 Income Personnel expenses 21.0 23.3 2.4 statement Administrative expenses 19.8 22.6 2.8 L
Slide 10: Net interest income
Net interest income ► Q1-22 NII on good level of Q4-21, well above all previous 3.0% 3.0% 2.9% 2.9% quarters 2.7% 60.6 60.2 58.2 53.9 Slight q-o-q reduction in NIM of 7 bp driven above all by 49.3 less number of days in Q1 ► Compared to Q1-21, NII EUR 10.9m or 22% higher in Q1-22 driven by both, p
Slide 11: Provisioning expenses
Provisioning expenses ► Q1-22 loan loss provisioning expenses at EUR 35.6m, driven almost entirely by higher expected credit losses of ProCredit bank Ukraine Ukraine provisions on portfolio basis done in Q1-22 (top-down approach), whilst Q2-22 expected to reflect provisions on a bottom-up or 238 b
Slide 12: Net fee and commission income
Net fee and commission income 13.8 ► Q1-22 net fee and commission income of EUR 12.6m, 5.5% or 13.0 12.0 12.1 12.6 EUR 0.6m above Q1-21 • Steady increases in number and volume of transactions, yielding higher income from money transfer and credit/debit card fees ► Q1-22 net fee and commission income
Slide 13: Operating expenses
Operating expenses ► Q1-22 cost-income ratio of 59.1% with marked improvement 68.7% YOY (-5.7pp) 64.8% 64.0% 59.0% 59.1% Cost-income ratio again below medium-term target of < 60%, 26.0 thus underlining scaling potential of the business model 23.3 Mainly driven by increased operating income by EU
Slide 14: Agenda
Agenda A Highlights B Group results C Segment performance D Asset quality and capital Q&A Appendix ProCredit Group | Q1 2022 results | Frankfurt am Main, 12 May 2022 13
Slide 15: Contribution of regional segments to group net income
Contribution of regional 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, PCB Germany (EUR 50m loan portfolio; EUR 261m deposits) (in EUR m
Slide 16: Segment perspective: South Eastern Europe
Segment perspective: South Eastern Europe Regional loan portfolio breakdown Development of key financials Operating income (€m) Cost-income ratio Bosnia & Herzegovina +20% -7.3 ppt 7% Albania 46.2 38.6 63.4% 56.1% 6% Bulgaria Romania 30% Q1-21 Q1-22 Q1-21 Q1-22 8% Profit after tax (€m) Return on equ
Slide 17: Segment perspective: Eastern Europe
Segment perspective: Eastern Europe Regional loan portfolio breakdown Development of key financials Operating income (€m) Cost-income ratio +32% +2.6 ppt Moldova 13% 22.9 45.4% 48% 17.4 Q1-21 Q1-22 Q1-21 Q1-22 Profit after tax (€m) Return on equity >-100% -46.3 ppt 7.1 13.8% Georgia Q1-21 Q1-22 Q1-2
Slide 18: Segment perspective: South America
Segment perspective: South America Regional loan portfolio breakdown Development of key financials Operating income (€m) Cost-income ratio +40% -17.6 ppt 4.0 5.6 99.7% 82.1% Q1-21 Q1-22 Q1-21 Q1-22 Profit after tax (€m) Return on equity Ecuador n/m n/m 100% 0.1 0.1 0.9% 1.0% Q1-21 Q1-22 Q1-21 Q1-22
Slide 19: Update on ProCredit Bank Ukraine
Update on ProCredit Bank Ukraine Current status of operations (12.05.2022) Regional categorization and risk classification (as per beginning May-22) ► Safety of staff key focus: more than 85% of staff working from decentralized locations in and outside Ukraine ► Banking operations in broad terms uni
Slide 20: Agenda
Agenda A Highlights B Group results C Segment performance D Asset quality and capital Q&A Appendix ProCredit Group | Q1 2022 results | Frankfurt am Main, 12 May 2022 19
Slide 21: Structure of the loan portfolio
Structure of the loan portfolio Loan portfolio by geographical segments Loan portfolio by sector Investment and other consumer loans Germany 1% Ecuador Housing 1% 7% Other economic 7% Moldova Bulgaria Wholesale and 3% activities 21% 7% retail trade Georgia 26% 6% Hotel, restaurant and catering 3% Co
Slide 22: Loan portfolio quality
Loan portfolio quality IFRS 9 ► Share of Stage 3 loans stable at good level of 2.3%, with war in Ukraine not yet resulting in meaningful increase in loan defaults Net 0.1% 0.1% 0.1% write-offs ► Share of Stage 2 loans at 7.8%, well above levels of Q4-21 and Coverage Q4-20 impaired 91.4% 96.8% 118.9%
Slide 23: Regulatory capital and risk-weighted assets
Regulatory capital and risk-weighted assets in EUR m Dec-21 Mar-22 ► Capital ratios well above regulatory capital requirements CET1 capital 792 785 (8.2% CET1 capital, 10.1% T1, 12.6% total capital) Additional Tier 1 capital 0 0 Tier 1 capital 792 785 ► CET1 capital includes profits as of September
Slide 24: Development of CET1 capital ratio (fully loaded)
Development of CET1 capital ratio (fully loaded) Q4-21 attributable profits Incl. Q1-22 attributable of EUR 17.6m; reversal of 2021 dividend Loan portfolio growth of EUR One-time downgrade of Ukraine accruals of EUR 20.7m loss of EUR 1.7m 105m (1.8%) sovereign rating to CCC ProCredit Group | Q1 2022
Slide 25: Agenda
Agenda A Highlights B Group results C Segment performance D Asset quality and capital Q&A Appendix ProCredit Group | Q1 2022 results | Frankfurt am Main, 12 May 2022 24
Slide 26: Q&A
Q&A Photovoltaic project financed by ProCredit Bulgaria 25
Slide 27: Agenda
Agenda A Highlights B Group results C Segment performance D Asset quality and capital Q&A Appendix ProCredit Group | Q1 2022 results | Frankfurt am Main, 12 May 2022 26
Slide 28: ProCredit – A unique approach to banking
ProCredit – A unique approach to banking Summary Key figures Q1 2022 and FY 2021 ► A profitable, development-oriented commercial group of banks Total assets Customer loan portfolio Deposit/loan with a focus on South Eastern and Eastern Europe EUR 8,164m EUR 6,029m 92% ► Headquartered in Frankfurt an
Slide 29: Overview of quarterly financial development
Overview of quarterly financial development In EUR m Q1-2021 Q2-2021 Q3-2021 Q4-2021 Q1-2022 Net interest income 49.3 53.9 58.2 60.6 60.2 Net fee and commission income 12.0 12.1 13.0 13.8 12.6 Other operating income (net) 1.6 0.6 3.9 2.9 4.8 Operating income 62.8 66.6 75.1 77.4 77.6 Income Personnel
Slide 30: Segment South Eastern Europe
Segment South Eastern Europe Regional loan portfolio breakdown Key financial data Bosnia & Herzegovina (in EUR m) Q1 2021 Q1 2022 Albania 7% 6% Net interest income 29.8 34.8 Bulgaria Romania 30% Net fee and commission income 7.5 8.0 8% Other operating income (net) 1.3 3.4 North Operating income 38.6
Slide 31: Segment Eastern Europe
Segment Eastern Europe Regional loan portfolio breakdown Key financial data Moldova (in EUR m) Q1 2021 Q1 2022 13% Net interest income 15.0 19.2 Net fee and commission income 1.8 1.7 Other operating income (net) 0.6 2.0 Operating income 17.4 22.9 Georgia 30% Ukraine Personnel expenses 3.0 4.5 57% Ad
Slide 32: Segment South America
Segment South America Regional loan portfolio breakdown Key financial data (in EUR m) Q1 2021 Q1 2022 Net interest income 4.4 6.0 Net fee and commission income -0.1 -0.1 Other operating income (net) -0.3 -0.3 Ecuador 100% Operating income 4.0 5.6 Personnel expenses 1.4 1.5 Admininistrative expenses
Slide 33: Development of green loan portfolio
Development of green loan portfolio Green loan portfolio growth 12.6% 15.4% 16.6% 18.7% 19.0% 19.1% ► Green loan portfolio amounting to EUR 1.2bn, representing 19.1% of total loan portfolio 1,128 1,151 985 36 40 Q1 2022 growth of EUR 23m, representing >20% of overall 795 21 loan portfolio growth 6
Slide 34: Structure of the loan portfolio by exposure and currency
Structure of the loan portfolio by exposure and currency Loan portfolio by exposure Loan portfolio by currency 7% 33% 19% 36% 52% 15% 12% 26% < 50k 50-250k 250-500k 500k-1.5m >1.5m EUR USD Other currencies ProCredit Group | Q1 2022 results | Frankfurt am Main, 12 May 2022 33
Slide 35: Structure of collateral
Structure of collateral Collateral by type (FY 2021) ► Majority of collateral consists of mortgages ► Growing share of financial guarantees mainly as a result of InnovFin and other guarantee programmes provided by the 24% European Investment Fund ► Clear, strict requirements for types of acceptable
Slide 36: Funding and rating
Funding and rating Funding sources overview ► Highly diversified funding structure and counterparties 5% 1%1% ► Customer deposits main funding source, accounting for 75%, supplemented by long-term funding from IFIs and institutional 18% Customer deposits investors Liabilities to banks Debt securitie
Slide 37: Liquidity update
Liquidity update Liquidity coverage ratio ► In Q1 the HLAs decreased, primarily driven by seasonal 181% developments of deposits and loans. 143% 151% ► LCR and NSFR remain comfortably above the regulatory 100% 100% 100% minimum. Mar-20 Mar-21 Mar-22 LCR Regulatory minimum Highly liquid assets (HLA)
Slide 38: Asset reconciliation
Asset reconciliation 10% Other assets Cash and cash 18% equivalents Net loans to (in EUR m) 72% customers ProCredit Group | Q1 2022 results | Frankfurt am Main, 12 May 2022 37
Slide 39: Liabilities and equity reconciliation
Liabilities and equity reconciliation Liabilities to 16% banks and IFIs 68% Liabilities to customers (in EUR m) Debt 4% Other liabilities 1% securities 10% Equity ProCredit Group | Q1 2022 results | Frankfurt am Main, 12 May 2022 38
Slide 40: Balance sheet
Balance sheet in EUR m Dec-21 Mar-22 Assets Cash and central bank balances 1,546 1,500 Loans and advances to banks 253 216 Investment securities 410 357 Loans and advances to customers 5,924 6,029 Loss allowance for loans to customers -131 -163 Derivative financial assets 1 5 Property, plant and equ
Slide 41: Income statement by segment
Income statement by segment 01.01.- 31.3.2022 South Eastern Germany Eastern Europe South America Consolidation Group (in EUR m) Europe Interest and similar income 5 32 42 10 -5 84 of which inter-segment 5 0 0 0 0 0 Interest and similar expenses 5 13 7 4 -5 24 of which inter-segment 0 1 2 2 0 0 Net i
Slide 42: Explanatory note on performance indicators and ratios
Explanatory note on performance indicators and ratios The ProCredit group uses an integrated system of indicators to monitor The group also considers the following additional indicators: and manage the implementation and further development of the group’s business and risk strategy: The ratio of c
Slide 43: Contact Investor Relations
Contact Investor Relations Financial calendar (continuously updated on IR Website) Date Place Event information 24.05.2022 Frankfurt/Main Equity Forum, Spring Conference 2022 31.05.2022 virtual Annual General Meeting 11.08.2022 Interim Report as of 30 June 2022 10.11.2022 Quarterly Financial Report
Slide 44: Disclaimer
Disclaimer The material in this presentation and further supporting documents have been This presentation and further supporting documents may contain forward- prepared by ProCredit Holding AG & Co. KGaA, Frankfurt am Main, Federal looking statements including statements regarding our intent, belief