Procredit Holding Ag · XETR:PCZ
Procredit — ProCredit Holding AG & Co. KGaA — FY2019 Earnings Presentation
44 slides from Procredit's earnings presentation, Mar 26, 2020
Slide 1: Q4/ FY 2019 results
Dr Gabriel Schor, Member of the Management Board Christian Dagrosa, Manager Q4/ FY 2019 results Frankfurt am Main, 26 March 2020
Slide 2: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q4 / FY 2019 results | Frankfurt am Main, 26 March 2020 1
Slide 3: Highlights 2019
Highlights 2019 Continued good business growth and solid financial result ► 10.3% growth in customer loans, of which more than 30%(1) from green loans ► Continuously high portfolio quality, with default portfolio further reduced to 2.5%, strong coverage at 89% ► 14.2% growth in deposits driven by bo
Slide 4: 2019 results versus guidance
2019 results versus guidance Guidance Actuals Commentary 2019 2019 Continued strong growth in the SME ► Growth of the loan portfolio 10 – 13% 10.3% segment At upper end of guided corridor, ► Profit for the period (EUR m) 48 – 55 54.3 reflecting exceptionally low cost of risk Negatively affected
Slide 5: Solid volume growth in loan portfolio (by exposure)
Solid volume growth in loan portfolio (by exposure) Note: Gross Loan volume growth split by exposure (previously shown by individual loan size) in all segments; (*) Gross Loan portfolio without ARDEC and Colombia ProCredit Group | Q4 / FY 2019 results | Frankfurt am Main, 26 March 2020 4
Slide 6: Strong deposit growth through digital banking channels
Strong deposit growth through digital banking channels Deposits by type of client ► Strong growth in deposit volume in Q4 and ytd in the first year after the introduction of ProCredit Direct 4,333 3,795 3,537 • Overall strong ytd growth of 14.2% 2,296 1,609 1,911 • achieved through growth in busines
Slide 7: Development of green loan portfolio
Development of green loan portfolio Green loan portfolio growth 9.1% 12.6% 15.4% 16.6% ► Strong growth of the green loan portfolio of 6.2% in Q4 19 795 and 17.4% in FY 2019 678 17 15 ► Includes financing of investments in 489 14 • Energy efficiency 331 779 662 • Renewable energies (in EUR m) 15 475
Slide 8: ProCredit is committed to foster sustainability
ProCredit is commited to foster sustainabilty Key facts 2019 Average training Diversity of our CO2 avoided Own CO2 hours per management in 2019(1) emissions(2) employee boards 53% / 47% 146 68,103 t -19% (women / men) Renewable Printing paper Electric/hybrid Certified green energy portfolio(2) per e
Slide 9: ProCredit response to COVID-19 pandemic
ProCredit response to COVID-19 pandemic Business continuity fully ensured Stable operations at PCH and all banks ► Comprehensive internal measures for safety of staff are taken ► Stable operations with no impact visible e.g. on payments or level of transactions ► IT infrastructure fully operational,
Slide 10: Outlook for ProCredit Group
Outlook for ProCredit Group Outlook 2020: ► Growth of the loan portfolio low single digit percentage increase ► Return on average equity (RoAE) positive, but lower compared to FY 2019 ► Cost-income ratio (CIR) c. 70% ► CET1 ratio > 13% ► Dividend payout ratio 1/3 of profits Medium term: In the mediu
Slide 11: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q4 / FY 2019 results | Frankfurt am Main, 26 March 2020 10
Slide 12: FY 2019 and Q4 2019 results at a glance
FY 2019 and Q4 2019 results at a glance In EUR m Q4-2018 Q4-2019 FY 2018 FY 2019 y-o-y Net interest income 46.9 50.9 186.2 194.5 8.3 Provision expenses -4.5 -5.7 -4.7 -3.3 1.4 Net fee and commission income 14.8 13.1 52.2 52.0 -0.2 Net result of other operating income 1.2 0.8 2.3 2.8 0.5 Operating in
Slide 13: Net interest income
Net interest income 3.2% 3.2% ► Net interest income on strong level of Q3 2019 3.1% 3.1% 3.1% ► Interest expenses impacted by high excess liquidity as a 51.0 50.9 result of strong deposit growth in H2 2019 46.9 47.3 45.4 ► Net interest margin broadly stable throughout the year ► Reduction in Q4 2019
Slide 14: Provisioning expenses
Provisioning expenses 19 bps 18 bps ► Net release of loan loss provision expenses in Q4 2019 ► Credit impaired loans further reduced by 20bps in Q4 2019 to 2.5% as of Dec-19 (ytd reduction of 60bps) 2.1 2.0 -4.5 -1.7 -5.7 ► Qoq increase in recoveries on written off loans of c. EUR 1m (EUR 3.7m in Q4
Slide 15: Net fee and commission income
Net fee and commission income 14.8 ► Quarterly net fee income stable at c. EUR 13m 13.1 13.1 13.1 12.7 ► Reduction in income from account maintenance fees between Q4 2018 and Q4 2019 (EUR 1.6m) driven by declining number of non- core private clients ► Quarterly fee income from account maintenance fe
Slide 16: Operating expenses
Operating expenses 76.6% 71.4% 69.8% 71.6% ► Temporary increase in the cost-income-ratio mainly driven 64.2% primarily by restructuring cost 21.2 20.3 ► Write down of head offices in Albania and Kosovo of c. EUR 4m 19.6 20.3 19.1 ► Write down of goodwill from PCB Romania of EUR 2.0m 28.4 ► Increase
Slide 17: Successful conclusion of group restructuring
Successful conclusion of group restructuring Group restructuring measures in FY 2019 Status Successful sale and deconsolidation of PCB Colombia ► P&L impact FY 2019 of €-7.2m Completed ► Loss on sale (€1.9m) booked in Q1, remaining effect from equity reserves (€5.3m) booked in Q4 Write-down of leg
Slide 18: 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 Consists above all of losses management, training and development from the disposal and deconsolidation of PCB Includes ProCredit Holding, Quipu, ProCredit Academy Fürth,
Slide 19: Key data per bank
Key data per bank North Bosnia & Country Bulgaria Serbia Kosovo Romania Macedonia Herzegovina Customer loan portfolio(1) (EUR m) 943 826 523 377 293 208 Change in customer loan portfolio(1) (%) 12.7% 12.2% 0.8% 13.3% 17.8% 8.5% Credit impaired loans (Stage 3) 1.9% 1.5% 2.9% 1.9% 2.2% 2.9% Profit aft
Slide 20: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q4 / FY 2019 results | Frankfurt am Main, 26 March 2020 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 Business loans: Eastern Ecuador Germany South Eastern Private loans: loans Europe: 1% Europe: 7% Housing 93% Moldova 6% 1% 23% Bulgaria 70% 6% Wholesale 3% 20% and retail Georgia Oth
Slide 22: Structure of the loan portfolio (continued)
Structure of the loan portfolio (continued) Loan portfolio by exposure Loan portfolio by currency 8% 30% 21% 34% 55% 14% 11% 27% < 50k 50-250k 250-500k 500k-1.5m >1.5m EUR USD Other currencies Notes: Loan portfolio by exposure and by currency in % of gross loan portfolio, continued operations (EUR 4
Slide 23: Loan portfolio quality
Loan portfolio quality IFRS 9 ► Share of default loans further reduced by 60bps since Dec-18 Net write- 0.4% 0.4% 0.3% offs(1)(5) Coverage ► Coverage remained broadly stable at around 90%, in impaired 84.6% 90.8% 89.1% spite of net release of loan loss provision expenses portfolio(2) Coverage ratio
Slide 24: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q4 / FY 2019 results | Frankfurt am Main, 26 March 2020 23
Slide 25: Asset reconciliation
Asset reconciliation ProCredit Group | Q4 / FY 2019 results | Frankfurt am Main, 26 March 2020 24
Slide 26: Liabilities and equity reconciliation
Liabilities and equity reconciliation Debt securities ProCredit Group | Q4 / FY 2019 results | Frankfurt am Main, 26 March 2020 25
Slide 27: Liquidity update
Liquidity update Liquidity coverage ratio ► LCR increase of 23pp qoq (11pp yoy), comfortably above 187% 198% regulatory minimum at all times 179% 100% 100% ► Further growth of HLAs in Q4 by c. EUR 120m driven by 80% strong deposit growth ► Yoy increase in HLAs of EUR 260m Dec-17 Dec-18 Dec-19 LCR ra
Slide 28: Regulatory capital and risk-weighted assets
Regulatory capital and risk-weighted assets Overview of capitalisation in EUR m Dec-18 Dec-19 ► CET1 ratio largely stable throughout 2019 CET1 capital 678 742 Additional Tier 1 capital 0 0 ► Decrease in total capital ratio due to early repayment of subordinated debt Tier 1 capital 678 742 Tier 2 cap
Slide 29: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q4 / FY 2019 results | Frankfurt am Main, 26 March 2020 28
Slide 30: Q&A
Q&A ProCredit Bank Georgia ProCredit Group | Q4 / FY 2019 results | Frankfurt am Main, 26 March 2020 29
Slide 31: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q4 / FY 2019 results | Frankfurt am Main, 26 March 2020 30
Slide 32: ProCredit – A unique approach to banking
ProCredit – A unique approach to banking Summary Key figures FY 2019 and FY 2018 ► 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 6,698m EUR 4,797m 90% ► Headquarte
Slide 33: Overview of quarterly financial development
Overview of quarterly financial development In EUR m Q4-2018 Q1-2019 Q2-2019 Q3-2019 Q4-2019 Net interest income 46.9 45.4 47.3 51.0 50.9 Provision expenses -4.5 2.1 2.0 -1.7 -5.7 Net fee and commission income 14.8 12.7 13.1 13.1 13.1 Net result of other operating income 1.2 0.9 -1.3 2.4 0.8 Operati
Slide 34: Segment South Eastern Europe
Segment South Eastern Europe Regional loan portfolio breakdown Key financial data Bosnia (in EUR m) FY 2018 FY 2019 Albania 6% 6% Net interest income 115.4 110.5 Bulgaria Romania 28% Provision expenses -0.5 -4.9 9% Net fee and commission income 36.1 35.9 Net result of other operating income -1.0 -3.
Slide 35: Segment Eastern Europe
Segment Eastern Europe Regional loan portfolio breakdown Key financial data Moldova (in EUR m) FY 2018 FY 2019 12% Net interest income 56.3 66.9 Provision expenses -1.8 2.1 Net fee and commission income 9.3 9.7 Net result of other operating income 3.3 5.0 Operating income 70.7 79.6 Georgia Operating
Slide 36: Segment South America
Segment South America Regional loan portfolio breakdown Key financial data (in EUR m) FY 2018 FY 2019 Net interest income 14.7 16.8 Provision expenses -2.4 -0.4 Net fee and commission income 0.0 -0.5 Net result of other operating income 1.4 -0.7 Ecuador 100% Operating income 18.6 16.0 Operating expe
Slide 37: Structure of collateral
Structure of collateral Collateral by type ► Majority of collateral consists of mortgages 20% ► Growing share of financial guarantees mainly as result of InnovFin and other guarantee programmes provided by the European Investment Fund ► Clear, strict requirements regarding types of acceptable collat
Slide 38: Development of CET1 capital ratio (fully loaded)
Development of CET1 capital ratio (fully loaded) Leverage ratio Leverage ratio 11.0% 10.8% ProCredit Group | Q4 / FY 2019 results | Frankfurt am Main, 26 March 2020 37
Slide 39: Funding and rating
Funding and rating Funding sources overview 6% 1% 1% ► Highly diversified funding structure and counterparties 4% ► Customer deposits main funding source, accounting for 74%, Customer deposits supplemented by long-term funding from IFIs and 14% Liabilities to IFIs institutional investors Liabilities
Slide 40: Balance sheet
Balance sheet in EUR m Dec-19 Dec-18 Assets Cash and central bank balances 1,082 964 Loans and advances to banks 321 212 Investment securities 378 297 Loans and advances to customers 4,797 4,392 Loss allowance for loans to customers -106 -124 Derivative financial assets 0 1 Property, plant and equip
Slide 41: Income statement by segment
Income statement by segment 01.01.- 31.12.2019 South Eastern Germany Eastern Europe South America Consolidation Group (in EUR m) Europe Interest and similar income 22.4 134.9 143.1 27.4 -22.8 305.0 of which inter-segment 22.0 1.0 -0.2 0.0 0.0 0.0 Interest and similar expenses 23.3 68.0 32.6 10.6 -24
Slide 42: Information regarding financial figures in this presentation
Information regarding financial figures in this presentation FY 2019: ► Financial data for the fiscal year ended 31 December 2019, as shown in the consolidated financial statements as of and for the fiscal year ended 31 December 2019. Q3 2019: ► Financial data for nine-month period ended 30 Septembe
Slide 43: 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 Quarterly Financial Report as of 31 March Investor Relations Team 14.05.2020 2020 16:00 CEST Analyst Conference Call tel.
Slide 44: 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
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