Procredit Holding Ag · XETR:PCZ
Procredit — ProCredit Holding AG & Co. KGaA — FY2017 Earnings Presentation
43 slides from Procredit's earnings presentation, Mar 27, 2018
Slide 1: Q4 / FY 2017 results
Borislav Kostadinov, Member of the Management Board Jana Donath, Manager Finance and Controlling Q4 / FY 2017 results Frankfurt am Main, 27th March 2018
Slide 2: ProCredit – A unique approach to banking
ProCredit – A unique approach to banking Summary Key figures FY 2017 and FY 2016 ► A profitable, development-oriented commercial banking group for SMEs Total assets Customer loan portfolio(1) Deposits/loans(2) with a focus on South Eastern Europe and Eastern Europe EUR 5,499m EUR 3,910m 91% ► Headqu
Slide 3: “Hausbank” for SMEs serving their typical banking needs
“Hausbank” for SMEs serving their typical banking needs Ukraine Comprehensive service as “Hausbank” Products Customers Value-added Simple loan and deposit products Target customers with high potential: SMEs Significant benefits for clients… ► Full range of business loans ► SMEs with formalised struc
Slide 4: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q4 2017 results | Frankfurt am Main, 27th March 2018 4
Slide 5: Delivering on our guidance
Delivering on our guidance Guidance Actuals Commentary 2017 2017 ► Growth of the loan portfolio in loans >EUR 30,000 (1) > 10% 18% Continued strong growth in the SME segment Influenced by exit of small loans and ► Growth of the total loan portfolio(1) > 8% 8% unfavorable currency exchange effect
Slide 6: 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 89% 28% 81% 58% 5% 2% Dec-13 Dec-16 Dec-17 Dec-13 Dec-16 Dec-17 Loan portfolio > EUR 30k in % total loan portfolio YTD Cash desk transactions in % total trans
Slide 7: Strong volume growth in core loan segment
Strong volume growth in core loan segment FY 2017 Focus on loans > EUR 50k -35% (EUR -236m) 18% (EUR +525m) +8% Initial loan size (in EUR) FY 2016 -28% (EUR -255m) 13% (EUR +341m) +2% Initial loan size (in EUR) Note: Loan volume growth split by initial loan size in all segments and excluding recover
Slide 8: Rollout of direct banking for private clients
Rollout of direct banking for private clients Ongoing implementation Examples ► Introduction of a unified range of client services for a standard fee in all ProCredit banks ► Launch of a single dedicated website: www.procreditbank-direct.com ► Release of new version of mobile banking app (live:
Slide 9: ProCredit Group Impact Report 2017
ProCredit Group Impact Report 2017 ► First sustainability report published according to Global Reporting Initiative (GRI) Standards ► The ProCredit Impact Report 2017 focuses on three main areas of positive impact: Our business model Our approach to clients Our approach to staff ► Economic developme
Slide 10: Successful capital increase to finance the continuation of the growth strategy
Successful capital increase to finance the continuation of the growth strategy Highlights ► Offering was upsized to 10% of the share capital during the book building on account of strong investor demand ► European Bank for Reconstruction and Development (EBRD) anchored the transaction pre-launch ► S
Slide 11: 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 (fully loaded) > 13% ► Cost-Income Ratio (CIR) < 70% ► Dividend payout ratio 1/3 of profits In the mid-term, and taking into consideration a stable political, econom
Slide 12: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q4 2017 results | Frankfurt am Main, 27th March 2018 12
Slide 13: Q4 / FY 2017 results at a glance
Q4 / FY 2017 results at a glance In EUR m Q3-2017 Q4-2017 2016 2017 y-o-y Net interest income 50.4 51.8 230.8 204.8 -11% Provision expenses 1.1 0.8 18.6 5.3 -72% Net fee and commission income 11.7 12.5 43.0 45.8 7% Net result of other operating income 2.8 -2.7 4.2 2.7 n.m. Operating income 63.8 60.9
Slide 14: Net interest income
Net interest income ► Net interest income declined due to declining market 4.4% 4.0% 4.0% 3.9% 3.9% rates, the targeting of large-exposure clients and currency devaluation in some of our markets 55.3 51.3 51.3 50.4 51.8 ► Margins are declining less rapidly than in previous quarters of 2016 and begin
Slide 15: Provisioning expenses
Provisioning expenses 32 bps ► LLP expenses are EUR 13.3m or 72% lower than in the previous year 20 bps ► PAR 30 improved by 1pp to 2.9% in comparison to 2016 3.0 8 bps and this is the major driver of the low LLP expenses 11 bps 5 bps ► PAR 30 coverage ratio increased by 6pp to 112% ► Recoveries of
Slide 16: Net fee and commission income
Net fee and commission income ► The increase of net fee and commission income was 12.5 predominantly driven by an adjustment of fees for account maintenance services, which we have gradually 11.7 implemented in most of our banks 10.9 10.7 10.9 ► The increase in income from account maintenance and ca
Slide 17: Operating expenses
Operating expenses 78.1% 73.8% 76.4% 75.7% ► Operating expenses decreased by EUR 11.4m or 5.8% 69.3% with respect to the previous year. In Q4, administrative expenses increased with respect to the previous quarter 22.1 due to one-off effects 21.7 22.0 20.3 ► The YTD cost base has been influenced by:
Slide 18: Contribution of segments to group net income FY 2017
Contribution of segments to group net income FY 2017 Group functions, e.g. risk management, reporting, capital management, liquidity management, training and development Profit contribution from entities in El Includes ProCredit Holding, Quipu, ProCredit Academy Fürth, ProCredit Bank Salvador and Ni
Slide 19: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q4 2017 results | Frankfurt am Main, 27th March 2018 19
Slide 20: Structure of the loan portfolio
Structure of the loan portfolio Loan portfolio by geographical segments Loan portfolio by sector South America: Germany: 6% 2% Private loans: Business loans: 10% 3% 2% 90% 1% 2% 5% 6% Eastern Europe: South Eastern 3% 19% 21% Europe: 71% 27% 8% 16% 10% 16% 6% 4% 5% 20% 6% 13% 21% 8% Bulgaria Serbia K
Slide 21: Structure of the loan portfolio (continued)
Structure of the loan portfolio (continued) Loan portfolio by initial loan size Loan portfolio by currency 8% 20% 18% 35% 51% 16% 38% 14% 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 3,884m as per
Slide 22: Loan portfolio quality
Loan portfolio quality Net write-offs 0.7% 0.4% ► Net write-offs at a low level in 2017 Coverage ratio ► Significant further improvement in portfolio at 66% 70% impaired(1) risk (PAR) during the year Coverage ratio PAR30(2) 106% 112% ► Prudent risk management underlined by high coverage ratios 6.3%
Slide 23: 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 23% European Investment Fund ► Clear, strict requirements regarding types of acceptable collateral, legal as
Slide 24: Development of green loan portfolio
Development of green loan portfolio Green loan portfolio growth ► Strong growth in the green loan portfolio (41% p.a. 3.0% 4.0% 6.4% 9.2% 12.6% 2013-2017) 489 ► Includes financing of investments in 14 ► Energy efficiency 331 16 264 21 475 ► Renewable energies 174 (in EUR m) 126 23 316 22 242 ► Other
Slide 25: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q4 2017 results | Frankfurt am Main, 27th March 2018 25
Slide 26: Asset reconciliation
Asset reconciliation Strong growth in core loan segment + EUR 145 m; further decline in loans < EUR 30k Deconsolidation of PCB El Salvador (sold in Nov-17) High level of liquidity at year-end due to seasonal increase in deposits 12% Other assets (in EUR m) Cash and cash 20% equivalents Net loans to
Slide 27: Liabilities and equity reconciliation
Liabilities and equity reconciliation Increase in liabilities to customers partially seasonally driven Deconsolidation of PCB El Salvador Increase in liabilities to (sold in Nov-17) banks and IFI’s to fund loan portfolio growth 7% Liabilities to banks (in EUR m) Liabilities to customers 65% 10% Liab
Slide 28: Liquidity update
Liquidity update Liquidity coverage ratio ► HLAs increased during Q4 mostly as a result of additional funding attracted from IFIs, as well as strong 194% deposit portfolio growth (partially seasonal). 179% ► All ratios improved and remained comfortably within limits. 70% 80% Dec-16 Dec-17 LCR ratio
Slide 29: Regulatory capital and risk-weighted assets
Regulatory capital and risk-weighted assets Overview of capitalisation in EUR m Dec-16 Sep-17 Dec-17 ► Increases in CET1, Total Capital CET1 capital (net of deductions) 574 594 595 and Leverage ratios due to reduction of RWA Additional Tier 1 capital (net of deductions) 0 0 0 Tier 1 capital 574 594
Slide 30: Development of CET1 capital ratio (fully loaded)
Development of CET1 capital ratio (fully loaded) IFRS 9 effects as of Capital increase Jan/2018 effects as of Feb/18 ~ (40) bp ~ 130 bp ProCredit Group | Q4 2017 results | Frankfurt am Main, 27th March 2018 30
Slide 31: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q4 2017 results | Frankfurt am Main, 27th March 2018 31
Slide 32: Q&A
Q&A ProCredit Bank Bulgaria, Thessaloniki Branch ProCredit Group | Q4 2017 results | Frankfurt am Main, 27th March 2018 32
Slide 33: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q4 2017 results | Frankfurt am Main, 27th March 2018 33
Slide 34: Overview of quarterly financial development
Overview of quarterly financial development In EUR m Q4-2016 Q1-2017 Q2-2017 Q3-2017 Q4-2017 Net interest income 55.3 51.3 51.3 50.4 51.8 Provision expenses 1.8 3.0 0.5 1.1 0.8 Net fee and commission income 10.9 10.7 10.9 11.7 12.5 Net result of other operating income 2.6 2.0 0.5 2.8 -2.7 Operating
Slide 35: Segment South Eastern Europe
Segment South Eastern Europe Regional loan portfolio split Key financial data Bosnia Albania 6% (in EUR m) FY 2016 FY 2017 7% Bulgaria Net interest income 150.5 131.1 27% Romania Provision expenses 8.0 0.2 8% Net fee and commission income 28.7 31.3 Net result of other operating income 1.5 -2.6 Maced
Slide 36: Segment Eastern Europe
Segment Eastern Europe Regional loan portfolio split Key financial data Moldova 12% (in EUR m) FY 2016 FY 2017 Net interest income 59.7 55.9 Provision expenses 12.7 6.0 Net fee and commission income 8.8 8.8 Ukraine Net result of other operating income 4.4 3.2 48% Operating income 60.1 62.0 Operating
Slide 37: Segment South America
Segment South America Regional loan portfolio split Key financial data Mexico 3% (in EUR m) FY 2016 FY 2017 Colombia 16% Net interest income 23.8 19.5 Provision expenses -2.0 -0.9 Net fee and commission income -0.2 -0.1 Net result of other operating income 2.0 1.2 Operating income 27.7 21.4 Operatin
Slide 38: Funding and rating update
Funding and rating update Funding sources overview ► Highly diversified funding structure and 4% 3% 1% counterparties 7% ► Customer deposits main funding source, accounting for 74% as of Dec-17 Customer deposits 11% Liabilities to IFIs ► Supplemented by long-term funding from Liabilities to banks IF
Slide 39: Balance sheet
Balance sheet in EUR m Dec-16 Dec-17 Assets Cash and cash equivalents 937 1,077 Loans and advances to banks 287 196 Financial assets at fair value through profit or loss 0 1 Available-for-sale financial assets 250 215 Loans and advances to customers 3,629 3,910 Allowance for losses on loans and adva
Slide 40: Income statement by segment
Income statement by segment 01.01. - 31.12.2017 South Eastern Germany Eastern Europe South America Consolidation Group (in EUR m) Europe Interest and similar income 18.5 99.8 152.6 32.3 -15.2 287.9 of which inter-segment 14.9 0.3 0.1 0.0 Interest and similar expenses 20.9 43.8 21.6 12.8 -15.9 83.2 o
Slide 41: Information regarding financial figures in this presentation
Information regarding financial figures in this presentation FY 2017: − Financial data for the fiscal year ended December 31, 2017, as shown in the consolidated financial statements as of and for the fiscal year ended December 31, 2017 Q3 2017: − Financial data for nine-month period ended September
Slide 42: Contact Investor Relations
Contact Investor Relations Contact details Financial calendar Date Place Event information Investor Relations Quarterly Statement as of 31-Mar-18, Analyst 15.05.2018 Conference Call ProCredit Holding AG & Co. KGaA Equity Forum Nadine Frerot 16.05.2018 Frankfurt/ Main Spring Conference 2018 tel.: +49
Slide 43: 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
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