Slide 1: Q1 2018 results
Borislav Kostadinov, Member of the Management Board Jana Donath, Manager Finance and Controlling Christian Dagrosa, Head of Controlling Q1 2018 results Frankfurt am Main, 15 May 2018
Slide 2: ProCredit – A unique approach to banking
ProCredit – A unique approach to banking Summary Key figures Q1 2018 and FY 2017 ► A profitable, development-oriented commercial banking group for SMEs Total assets Customer loan portfolio Deposits/loans(1) with a focus on South Eastern Europe and Eastern Europe EUR 5,409m EUR 4,021m 86% ► Headquart
Slide 3: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q1 2018 results | Frankfurt am Main, 15 May 2018 3
Slide 4: Where do we come from? Significant progress since 2013
Where do we come from? Significant progress since 2013 Focused growth in SME loan categories (1) Decrease in number of cash desk transactions 28% 80% 81% 46% 2% 1% Dec-13 Dec-17 Mar-18 Dec-13 Dec-17 Mar-18 Loan portfolio > EUR 50k in % total loan portfolio YTD Cash desk transactions in % total trans
Slide 5: Recent key achievements
Recent key achievements Execution of business client strategy ► Successful positioning as Hausbank for SMEs resulting in strong growth with target clients (LP growth of 3%) ► Efficiency measures leading to improved cost-income ratio (70.2%) Execution of private client strategy ► Unified range of cli
Slide 6: Strong volume growth in core loan segment
Strong volume growth in core loan segment Q1 2018 +3% Initial loan size (in EUR) +8% FY 2017 Initial loan size (in EUR) Note: Loan volume growth split by initial loan size in all segments and excluding recovery unit “ARDEC” in Mexico; % are calculated as sum of YTD changes of the bracketed size cate
Slide 7: Roll-out of direct banking for private clients
Roll-out of direct banking for private clients ProCredit FlexSave Housing Loan Current Account ProCredit FlexFund Investment Loan Term Deposit Europe South America Roll-out completed Offer implemented, mobile banking roll-out ongoing Not in scope ProCredit Group | Q1 2018 results | Frankfurt am Main
Slide 8: Outlook for ProCredit Group 2018
Outlook for ProCredit Group 2018 ► Growth of the loan portfolio 12 - 15%(1) ► Return on Average Equity (RoAE) 7.5 – 8.5% ► CET1 ratio > 13% ► Cost-income ratio (CIR) < 70% ► Dividend payout ratio 1/3 of profits In the mid-term, and taking into consideration a stable political, economic and operating
Slide 9: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q1 2018 results | Frankfurt am Main, 15 May 2018 9
Slide 10: Q1 2018 results at a glance
Q1 2018 results at a glance In EUR m Q1-2017 Q4-2017 Q1-2018 y-o-y Net interest income 51.3 51.8 46.6 -9% Provision expenses 3.0 0.8 0.1 -98% Net fee and commission income 10.7 12.5 11.4 7% Net result of other operating income 2.0 -2.7 1.4 -32% Operating income 61.1 60.9 59.4 -3% Income Operating ex
Slide 11: Net interest income
Net interest income ► Net interest income declined in Q1 due to seasonal 4.0% 4.0% 3.9% 3.9% 3.4% effects, sale of discontinued operations and negative exchange rate effects. 51.3 51.3 50.4 51.8 ► Strategic focus on SME clients is associated with 46.6 significant positive effects on both risk and op
Slide 12: Provisioning expenses
Provisioning expenses 32 bps ► In Q1 2018, loan loss allowance expenses (LLP) of EUR 0.1m have been recorded (average for 2017: EUR 1.3m per quarter) 3.0 5 bps ► Loan portfolio quality improved and is the major driver of 11 bps 1 bps the low LLP expenses (Credit impaired loans decreased 8 bps by 0.4
Slide 13: Net fee and commission income
Net fee and commission income ► Net fee and commission income was higher than in Q1 12.5 2017, yet lower than in the previous two quarters. 11.7 11.4 10.9 ► Income from account maintenance fee largely remained 10.7 on the level of Q4 2017. ► Income from fees for money transfers went down compared to
Slide 14: Operating expenses
Operating expenses 73.8% 76.4% 69.3% 76.4% 70.2% ► Operating expenses have decreased significantly, efficiency gains from branch and service point closures have already materialised since Q3/17 and are more visible in Q1/18. 22.0 21.7 20.3 ► The cost base has been influenced by: 20.6 19.5 ► One-time
Slide 15: Contribution of segments to group net income Q1 2018
Contribution of segments to group net income Q1 2018 Group functions, e.g. risk management, reporting, capital management, liquidity management, training and development. Includes ProCredit Holding, Quipu, ProCredit Academy Fürth, ProCredit Bank Germany (EUR 99m customer loan portfolio; EUR 270m cus
Slide 16: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q1 2018 results | Frankfurt am Main, 15 May 2018 16
Slide 17: Structure of the loan portfolio
Structure of the loan portfolio Loan portfolio by geographical segments Loan portfolio by sector South America: Germany: 2% Private loans: Business loans: 6% 9% 91% 1% 2% 1% 1% 5% 8% Eastern Europe: South Eastern 3% 19% 21% Europe: 70% 28% 8% 16% 11% 16% 6% 4% 5% 20% 6% 13% 22% 7% Bulgaria Serbia Ko
Slide 18: Structure of the loan portfolio (continued)
Structure of the loan portfolio (continued) Loan portfolio by initial loan size Loan portfolio by currency 9% 19% 18% 36% 51% 16% 38% 13% EUR USD Other currencies < 50k 50-250k 250-500k 500k-1.5m >1.5m Notes: Loan portfolio by initial loan size in % of total outstanding principal (EUR 3,993m as of 3
Slide 19: Loan portfolio quality
Loan portfolio quality IAS 39 IFRS 9 ► The low level of net write-offs from 2017 continues in Q1 of 2018 Net write-offs (1) 0.4% 0.4% 0.4% ► Further improvement in loan portfolio quality in Q1 2018 Coverage impaired 70.0% 81.3% 83.0% portfolio(2) ► Prudent risk management underlined Coverage ratio b
Slide 20: Development of green loan portfolio
Development of green loan portfolio Green loan portfolio growth ► Strong growth in the green loan portfolio 4.0% 6.4% 9.1% 12.6% 13.3% 531 ► Includes financing of investments in 489 14 14 ► Energy efficiency 331 15 264 517 ► Renewable energies 21 475 174 (in EUR m) 23 242 316 ► Other environmentally
Slide 21: Structure of collateral
Structure of collateral Collateral by type ► Majority of collateral consists of mortgages ► Growing share of financial guarantees mainly as a result of the InnovFin initiative provided by the European Investment Fund 22% ► Clear, strict requirements regarding types of acceptable collateral, legal as
Slide 22: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q1 2018 results | Frankfurt am Main, 15 May 2018 22
Slide 23: Asset reconciliation
Asset reconciliation Reduction of seasonal excess Strong portfolio growth net of liquidity available at year-end additional IFRS 9 provisions 13% Other assets Cash and cash 15% equivalents (in EUR m) 72% Net loans to customers ProCredit Group | Q1 2018 results | Frankfurt am Main, 15 May 2018 23
Slide 24: Liabilities and equity reconciliation
Liabilities and equity reconciliation Decline in deposits largely Capital increase in February related to seasonal effects on 2018, IFRS 9 effect and deposits from business clients capitalised profit Liabilities to banks 16% and IFIs Liabilities to 64% customers Debt securities 3% 1% Other liabiliti
Slide 25: Liquidity update
Liquidity update Liquidity coverage ratio ► Liquidity coverage ratio still well above the increased 179% 181% regulatory requirements ► After the significant increase of HLAs in Q4 2017 100% resulting from additional funding from IFIs and growth of 80% deposit portfolio, the liquidity was utilised i
Slide 26: Regulatory capital and risk-weighted assets
Regulatory capital and risk-weighted assets Overview of capitalisation ► Increases in CET1, Total Capital in EUR m Dec-17 Mar-18 and Leverage ratios due to the capital CET1 capital (net of deductions) 595 640 increase in Feb. 2018 Additional Tier 1 capital (net of deductions) 0 0 ► IFRS 9 effects fu
Slide 27: Development of CET1 capital ratio (fully loaded)
Development of CET1 capital ratio (fully loaded) Leverage ratio 11.4% Leverage ratio 10.5% ProCredit Group | Q1 2018 results | Frankfurt am Main, 15 May 2018 27
Slide 28: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q1 2018 results | Frankfurt am Main, 15 May 2018 28
Slide 29: Q&A
Q&A ProCredit Bank Georgia ProCredit Group | Q1 2018 results | Frankfurt am Main, 15 May 2018 29
Slide 30: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q1 2018 results | Frankfurt am Main, 15 May 2018 30
Slide 31: ProCredit Group Impact Report 2017
ProCredit Group Impact Report 2017 ► First sustainability report published according to Global Reporting Initiative (GRI) Standards ► The ProCredit Group Impact Report 2017 focuses on three main areas of positive impact: Our business model Our approach to clients Our approach to staff ► Economic dev
Slide 32: Overview of quarterly financial development
Overview of quarterly financial development In EUR m Q1-2017 Q2-2017 Q3-2017 Q4-2017 Q1-2018 Net interest income 51.3 51.3 50.4 51.8 46.6 Provision expenses 3.0 0.5 1.1 0.8 0.1 Net fee and commission income 10.7 10.9 11.7 12.5 11.4 Net result of other operating income 2.0 0.5 2.8 -2.7 1.4 Operating
Slide 33: Segment South Eastern Europe
Segment South Eastern Europe Regional loan portfolio breakdown Key financial data Bosnia (in EUR m) Q1 2017 Q1 2018 Albania 6% 7% Bulgaria Net interest income 33.4 27.9 27% Romania Provision expenses 0.1 -2.0 8% Net fee and commission income 7.4 8.0 Net result of other operating income 0.2 1.3 Maced
Slide 34: Segment Eastern Europe
Segment Eastern Europe Regional loan portfolio breakdown Key financial data Moldova (in EUR m) Q1 2017 Q1 2018 12% Net interest income 13.3 13.9 Provision expenses 3.1 -0.5 Net fee and commission income 2.1 2.0 Net result of other operating income 0.8 0.7 Ukraine Operating income 13.0 17.1 51% Opera
Slide 35: Segment South America
Segment South America Regional loan portfolio breakdown Key financial data Mexico (in EUR m) Q1 2017 Q1 2018 4% Colombia Net interest income 5.7 3.9 17% Provision expenses -0.3 1.2 Net fee and commission income 0.0 -0.2 Net result of other operating income 0.0 1.3 Operating income 6.0 3.8 Operating
Slide 36: Funding and rating update
Funding and rating update Funding sources overview ► Highly diversified funding structure and 3% 3% 1% counterparties 5% ► Customer deposits main funding source, accounting for 74% as of Mar-18 14% Customer deposits Liabilities to IFIs ► Supplemented by long-term funding from Liabilities to banks IF
Slide 37: Balance sheet
Balance sheet in EUR m Mar-18 Dec-17 Assets Cash and central bank balances 810 1,077 Loans and advances to banks 197 196 Investment securities 285 0 Available-for-sale financial assets 0 215 Loans and advances to customers 4,021 3,910 Allowance for losses on loans and advances to customers -147 -129
Slide 38: Income statement by segment
Income statement by segment 01.01.- 31.03.2018 South Eastern Germany Eastern Europe South America Consolidation Group (in EUR m) Europe Interest and similar income 4.4 24.8 33.6 6.6 -2.7 66.7 of which inter-segment 2.7 0.0 0.0 0.0 Interest and similar expenses 5.0 10.9 5.6 2.8 -4.1 20.1 of which int
Slide 39: Information regarding financial figures in this presentation
Information regarding financial figures in this presentation Q1 2018: − Financial data for three-month period ended 31 March 2018, as shown in the unaudited quarterly financial report ended 31 March 2018 FY 2017: − Financial data for the fiscal year ended 31 December 2017, as shown in the consolidat
Slide 40: Contact Investor Relations
Contact Investor Relations Contact details Financial calendar Date Place Event information Investor Relations Equity Forum 16.05.2018 Frankfurt/ Main Spring Conference 2018 ProCredit Holding AG & Co. KGaA Nadine Frerot 23.05.2018 Frankfurt/ Main Annual General Meeting Interim Report as of 30-Jun-18,
Slide 41: Disclaimer
Disclaimer The material in this presentation and further supporting documents have been prepared by ProCredit Holding AG & Co. KGaA, Frankfurt am Main, Federal Republic of Germany (“ProCredit Holding”) and are general background information about the ProCredit group’s activities current as at the da