Procredit Holding Ag · XETR:PCZ
Procredit — ProCredit Holding AG & Co. KGaA — Investor Day (October 2021)
41 slides from Procredit's investor day presentation, Oct 12, 2021
Slide 1: ProCredit strategy and business model
Dr Gabriel Schor, Management Board Member Christian Dagrosa, Manager ProCredit strategy and business model Capital markets day, October 2021
Slide 2: Agenda
Agenda A Our mission B Business strategy C Financial results & guidance Appendix ProCredit Group | Capital markets day | Frankfurt am Main, 12 October 2021 1
Slide 3: Our mission
Our mission We strive to be the leading SME bank in our markets following sustainable and impact- oriented banking practices. In doing so, we want to generate long-term sustainable returns and create positive impact in the economies and societies we work in. 2
Slide 4: Agenda
Agenda A Our mission B Business strategy C Financial results & guidance Appendix ProCredit Group | Capital markets day | Frankfurt am Main, 12 October 2021 3
Slide 5: Our group profile
ێ ProCredit Our group profile
Slide 6: ProCredit – a unique approach to banking
ProCredit – a unique approach to banking Key elements of the ProCredit approach ProCredit at a glance ► An impact-oriented group of commercial banks with a Hausbank ProCredit Direct focus on SMEs in Eastern and South Eastern for SMEs for Private Clients Europe. Headquartered in Frankfurt and supervi
Slide 7: Impact orientation firmly integrated in the business model
Impact orientation firmly integrated in the business model Impact through Environmental Comprehensive staff Sustainable business business responsibility development model ► Supporting SMEs through ► Green loan portfolio > ► High diversity. Gender ► Long-term client relationships the cycle €1.1bn, av
Slide 8: Impact-orientation firmly integrated in the business model (continued)
Impact-orientation firmly integrated in the business model (continued) Impact through business Environmental responsibility Comprehensive staff development Sustainable business model 94% of loan portfolio to SMEs Green Green Loan loan Portfolio portfolio Diversity is our reality Long-term sustainabl
Slide 9: We partner with SMEs – the ProCredit Hausbank principle
We partner with SMEs – the ProCredit “Hausbank” principle Target SME clients ► Growing, stable, digital and transparent businesses ► Forward-looking SMEs investing in innovation and green technology ► SMEs which bank fully with ProCredit: e.g. loans, cards, transactions, deposits Our approach ► Comp
Slide 10: ProCredit Direct – an entirely digital offer for Private Clients
ProCredit Direct – an entirely digital offer for Private Clients Target private clients ► Middle income and higher earners ► Associated with SME owners ► Looking for modern, transparent and reliable banking services Our approach ► All-in digital offer – digital banking concept consequentially execut
Slide 11: Track record of profitability through the economic cycle
Track record of profitability through the economic cycle Long-term financial stability and attractive profitability Profit Group RoE 15% 75 Average RoE: c. 9% 50 61 61 10% 54 54 47 50 48 44 46 39 41 36 36 5% 25 30 28 in EUR m 12 13 0 0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 201
Slide 12: Good positioning for growth based on successful group strategic refocusing & restructuring
Good positioning for growth based on successful group strategic refocusing & restructuring Sharpened group profile with focus on SMEs in Eastern Europe as result of successful group restructuring since 2013 Loan portfolio > EUR 50k in % total Overall branch network ► Consistent focus on small and me
Slide 13: Attractive regional focus
Attractive regional focus 12
Slide 14: Strong regional footprint across Eastern and South Eastern Europe
Strong regional footprint across Eastern and South Eastern Europe Customer loan portfolio per country Romania EUR 367m Moldova Serbia EUR 162m Ukraine EUR 990m EUR 682m Germany EUR 58m Bosnia & Herzeg. EUR 251m Georgia EUR 369m Well diversified loan portfolio Bulgaria ► Strong footprint in South Eas
Slide 15: Regional focus with attractive further growth potential
Regional focus with attractive further growth potential ProCredit’s SEE/EE banking markets with attractive growth prospects – high importance of SMEs GDP growth of SEE/EE vs Euro area (real GDP, median) ► Focus on SME financing in 10 SEE/EE markets based on attractive underlying growth prospects and
Slide 16: Our business approach clearly differentiates ProCredit banks in our markets of operation
Our business approach clearly differentiates ProCredit banks in our markets of operation Long-term commitment to our focus regions South Eastern and Eastern Europe – no large “home market” and HQ focused on enhancing group performance with standardized, best practice approaches implemented in all ba
Slide 17: Unique group profile with best-in-class regional diversification
A Unique group profile with best-in-class regional diversification across SEE/EE and strong focus on SME business Best-in-class loan book diversification across SEE/EE Best-in-class focus on business lending Share of largest country Largest # countries Share of business loans in ProCredit’s Eastern
Slide 18: Consistently strong growth in business loans
B Consistently strong growth in business loans Strongest growth in business loans driven by ProCredit banks outgrow local banking markets focus on SME clients Growth of business loans in ProCredit’s Eastern European Growth of business loans vs. selected banking markets (last 18m) markets of operatio
Slide 19: Structurally low risk cost are embedded in the ProCredit business model
C Structurally low risk cost are embedded in the ProCredit business model Prudent approach to credit risk drive by low NPL ratio Conservative risk profile vs. local banking markets Share of non-performing loans in ProCredit’s Eastern NPL ratio vs. selected banking markets (H1-2021) European markets
Slide 20: Attractive margins supported by structurally low risk costs
D Attractive margins supported by structurally low risk costs Best-in-class risk-adjusted margins: Upside of regional focus on Eastern Europe, but not at downside of increased risk Group net interest margin (average FY 2015 until H1-2021) Also as of H1-21: ProCredit risk- adjusted margin of 2.7% wel
Slide 21: Efficient and focused group set-up with upside from increased scale yet to come
E Efficient and focused group set-up with upside from increased scale yet to come Efficient staff and branch set-up leading to best-in-class Upside potential on group CIR yet to come with continued efficiency relative to loan portfolio scale benefits as result of growth ambitions Loan portfolio per
Slide 22: Agenda
Agenda A Our mission B Business strategy C Financial results & guidance Appendix ProCredit Group | Capital markets day | Frankfurt am Main, 12 October 2021 21
Slide 23: Key financials FY 2020 and H1 2021
Key financials FY 2020 and H1 2021 22
Slide 24: Strong financial performance continued in H1 2021
Strong financial performance continued in H1 2021 Loan portfolio (€bn) Deposits (€bn) Cost of risk (bps) Profit after tax +12.0% +12.9% -54 +67.6% 5,7 64 5,1 5,0 36,4 4,4 21,7 10 H1-20 H1-21 H1-20 H1-21 H1-20 H1-21 H1-20 H1-21 ► Continued steady growth in both loan portfolio and deposits ► Steady bu
Slide 25: Comfortable capital position and outlook
Comfortable capital position and outlook in EUR m Dec-20 Jun-21 Capital: CET1 capital 706 737 ► Capital ratios well above regulatory capital requirements (8.2% CET1, 10.1% T1, 12.6% TC) Additional Tier 1 capital 0 0 ► EUR 20.6m (35ct per share) deducted from CET1 capital for dividend Tier 1 capital
Slide 26: Medium-term guidance
ێ ProCredit Medium-term guidance 25
Slide 27: Strong track record of delivering on guidance
Strong track record of delivering on guidance Guidance achieved in Updated, Strong progress previous 4 years on track FY 2017 FY 2021 guidance Medium-term targets guidance c. 10% loan portfolio growth ~10% loan portfolio growth FY 2018 8.0 – 9.5% RoE ~10% RoE guidance FY 2019 c. 65% CIR <60% C
Slide 28: Recent results demonstrate strong progress towards achieving the medium-term targets
Recent results demonstrate strong progress towards achieving the medium-term targets Loan portfolio growth p.a. Mid-term guidance: c. 10.3% 9.5% ► Strong track record with c. 10% loan growth achieved in previous years 7.7% ► Y 2021 well under way with H1-21 growth of 7.7% (not annualized) 2019 2020
Slide 29: Potential for higher levels of profitability going forward
Potential for higher levels of profitability going forward FY 2021 FY 2022 / 23 FY 2024 and later Strong progress towards guidance: Consolidation of profitability level: Upside potential: ► Medium-term guidance close to being Further solidify at RoE level of approx. 10% ► Future profitability depend
Slide 30: Sharp group profile as strong base for key strategic outline
Sharp group profile as strong base for key strategic outline Grow core business and market share – retain high quality Continue to strengthen scalable operational base Technology: Staff: ► Move all banks onto enhanced ► Intensify staff participation in centralized database ProCredit Academies ► Comp
Slide 31: Thank you for your attention
Thank you for your attention Photovoltaic project financed by ProCredit Bulgaria 30
Slide 32: Agenda
Agenda A Our mission B Business strategy C Financial results & guidance Appendix ProCredit Group | Capital markets day | Frankfurt am Main, 12 October 2021 31
Slide 33: Today's speakers
Today’s speakers ProCredit Holding management board Sandrine Massiani 17 Dr Gabriel Schor ► AML and compliance ► Accounting and taxes ► Audit ► Administration and translation ► Human resources ► Communications ► Legal ► Funding and treasury ► Risk management ► Investor relations ► Reporting and cont
Slide 34: ProCredit – a unique approach to banking
ProCredit – a unique approach to banking Key elements of the ProCredit approach ProCredit at a glance ► An impact-oriented group of commercial banks with a Hausbank ProCredit Direct focus on SMEs in Eastern and South Eastern for SMEs for Private Clients Europe. Headquartered in Frankfurt and supervi
Slide 35: Selected key historic milestones
Selected key historic milestones ENVIRONMENTAL GREEN FINANCE Positive MANAGEMENT FIRST GREEN APPROACH ESG FIRST GREEN LOANS fully implemented - RATING BOND AND GREEN granted for energy ENVIRONMENTAL all ProCredit banks by MSCI Placement for Introduction of the MANAGEMENT (EM) ACHIEVEMENTS efficiency
Slide 36: Summary of key financial indicators
Summary of key financial indicators In EUR m H1-2020 H1-2021 y-o-y Net interest income 99.9 103.2 3.3 Net fee and commission income 22.6 24.1 1.5 Other operating income (net) 2.1 2.0 -0.1 Operating income 124.6 129.3 4.7 Income Personnel expenses 41.2 42.1 0.9 statement Administrative expenses 41.6
Slide 37: Selected key data per bank (FY 2020)
Selected key data per bank (FY 2020) North Bosnia & Country Bulgaria Serbia Kosovo Romania Macedonia Herzegovina Customer loan portfolio (EUR m) 1,099 945 535 424 344 238 Change in customer loan portfolio (%) 16.5% 14.4% 2.3% 12.4% 17.6% 13.9% Credit impaired loans (Stage 3) 2.5% 1.2% 3.4% 1.4% 1.7%
Slide 38: Selected key data per bank (H1 2021)
Selected key data per bank (H1 2021) North Bosnia & Country Bulgaria Serbia Kosovo Romania Macedonia Herzegovina Customer loan portfolio (EUR m) 1,170 990 563 452 367 251 Change in customer loan portfolio (%) 6.5% 4.7% 5.3% 6.6% 6.6% 5.5% Credit impaired loans (Stage 3) 1.9% 1.5% 3.0% 1.9% 1.6% 2.9%
Slide 39: Notes and sources
Notes and sources Slide 8: The Fitch Issuer Default Rating of BBB has been last re-affirmed on March 29 Slide 9: ProCredit Holding AG & Co. KGaA is a signatory to the Principles for Responsible Banking and is a member of the UN Environment Programme Finance Initiative (UNEP FI) Slide 13: RoE s
Slide 40: Notes and sources
Notes and sources Slide 21: “Prudent approach to credit risk drive by low NPL ratio”: Information based on the most recent stand-alone financial information of peer groups’ banks operating in the ten Eastern European markets in which ProCredit is also present “Conservative risk profile vs. local
Slide 41: 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
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