Procredit Holding Ag · XETR:PCZ
Procredit — Q3 2022 Earnings Presentation
45 slides from Procredit's earnings presentation, Nov 10, 2022
Slide 1: Q3 2022 results
Hubert Spechtenhauser, Chairman of the Management Board Dr Gabriel Schor, Member of the Management Board Christian Dagrosa, Manager Q3 2022 results Frankfurt am Main, November 2022
Slide 2: Agenda
Agenda A Highlights B Group results C Segment performance D Asset quality and capital Q&A Appendix ProCredit Group | Q3 2022 results | Frankfurt am Main, 10 November 2022 1
Slide 3: Highlights 9M 2022
Highlights 9M 2022 Resilient 9M 2022 result driven by strong income development in all group banks except for operations in Ukraine ► Group result of EUR 17.3m (ann. RoE 2.7%), supported by 20bps increase in NIM to 3.0% and good increase in operating income by 21%; CIR at 60.7% ► Includes provisioni
Slide 4: Continued strong growth in customer loans
Continued strong growth in customer loans Loan portfolio growth ► 9M 2022 customer loan growth of EUR 368m or 6.2% 6.2% 112 6,292 Growth in all loan categories, with balanced demand for 70 185 20% working capital loans with maturities < 3 years and investment 5,924 and green loans 43% Loan growt
Slide 5: Good deposit development through digital banking channels
Good deposit development through digital banking channels ► YOY increase of EUR 712m (+13.5%) based on strong client Deposits by product relationships and growing appeal of digital approach Achieved mostly through growth in business clients, also private client deposits increasing visibly (+ EUR 2
Slide 6: Positive expected GDP development in SEE/EE despite more difficult overall environment
Positive expected GDP development in SEE/EE despite more difficult overall environment GDP outlook for SEE/EE remains intact, Euro area lower Macroeconomic environment / key current themes SEE/EE, excluding Ukraine(1) Euro area • Ongoing with significant human and economic losses in War on Ukraine;
Slide 7: Good progress in terms of overall FY 2022 guidance, updated guidance metrics as per 9M 2022
Good progress in terms of overall FY 2022 guidance, updated guidance metrics as per 9M 2022 Updated guidance Actual FY 2022 9M 2022 Medium single digit percentage growth1 6.2% ► Growth of the loan portfolio Previous: High single digit percentage growth1 (5.1% FX adjusted) Substantially below the lev
Slide 8: Agenda
Agenda A Highlights B Group results C Segment performance D Asset quality and capital Q&A Appendix ProCredit Group | Q3 2022 results | Frankfurt am Main, 10 November 2022
Slide 9: Q3 2022 results at a glance
Q3 2022 results at a glance In EUR m Q3-2021 Q3-2022 9M-2021 9M-2022 Y-o-Y Net interest income 58.2 67.2 161.4 192.1 30.7 Net fee and commission income 13.0 14.0 37.1 40.2 3.2 Other operating income (net) 4.0 5.2 6.1 14.3 8.3 Operating income 75.2 86.4 204.5 246.6 42.1 Income Personnel expenses 22.0
Slide 10: Net interest income
Net interest income ► Q3-22 NII increased EUR 2.5m or 3.7% vs. Q2-22 to EUR 67.2m, well above all previous quarters and with continued 3.2% 3.0% 3.1% positive dynamic 3.0% 2.9% 2.9% 3.1% Good development in spite of EUR 2.6m decline in Ukraine 2.7% due to Jul-22 currency devaluation and increased
Slide 11: Provisioning expenses
Provisioning expenses ► Q3-22 loan loss provisioning expenses at EUR 21.8m, mostly 238 bps driven by provisions for Ukrainian portfolio and additional management overlays Ongoing risk assessment within the Ukrainian portfolio in Q3 resulting in EUR 16.6m provisions Provisioning in other group ba
Slide 12: Net fee and commission income
Net fee and commission income ► Q3-22 net fee and commission income of EUR 14.0m, 2.3% or 14.0 EUR 0.3m above Q2-22 13.8 13.7 13.0 12.6 • Increase back to level achieved in Q4-21 mostly related to good transaction business ► Against Q3-21, net fee and commission income shows increase of EUR 1.0m or
Slide 13: Personnel and administrative expenses
Personnel and administrative expenses ► Q3-22 cost-income ratio of 61.9% increased on Q2-22, including EUR 1.4m net negative extraordinary items 68.7% 61.0% 61.9% 59.0% 59.1% EUR 2.7m one-time legal and advisory and audit fees in relation to war in Ukraine incl. fees for amendment of outstanding b
Slide 14: Agenda
Agenda A Highlights B Group results C Segment performance D Asset quality and capital Q&A Appendix ProCredit Group | Q3 2022 results | Frankfurt am Main, 10 November 2022
Slide 15: Contribution of regional segments to group net income (9M 2022)
Contribution of regional segments to group net income (9M 2022) 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 264m deposits)
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 Albania Bosnia & 6% +21% -5.9pp Herzegovina 6% 120.3 145.7 62.4% 56.4% Bulgaria Romania 32% 9M-21 9M-22 9M-21 9M-22 8% Profit after tax (€m) Return on equ
Slide 17: Segment perspective: Eastern Europe
Segment perspective: Eastern Europe Development of key financials Regional loan portfolio breakdown Operating income (€m) Cost-income ratio Moldova +19% +1.2pp 14% 60.3 71.5 44.6% 45.8% 9M-21 9M-22 9M-21 9M-22 Profit after tax (€m) Return on equity n/m -33.8pp 17.6% 28.4 Ukraine 53% 9M-21 9M-22 9M-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 +37% -15.6pp 17.7 95.1% 12.9 79.5% 9M-21 9M-22 9M-21 9M-22 Profit after tax (€m) Return on equity Ecuador >100% +4.7pp 100% 5.1% 2.0 0.1 0.4% 9M-21 9M-22 9M-21 9
Slide 19: Update on ProCredit Bank Ukraine
Update on ProCredit Bank Ukraine Current status of operations (Nov-22) Regional risk classification (as per beginning Nov-22) ► Safety of staff: Most staff back in Ukraine, with approx. 7% continuing to work from abroad ► Banking operations basically uninterrupted since beginning of the war: Additio
Slide 20: Agenda
Agenda A Highlights B Group results C Segment performance D Asset quality and capital Q&A Appendix ProCredit Group | Q3 2022 results | Frankfurt am Main, 10 November 2022
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 Ecuador Other Housing 1% 1% 8% economic 7% Moldova Wholesale and Bulgaria activities 3% retail trade 22% 7% Hotel, 25% Georgia restaurant and 7% catering 3% Co
Slide 22: ProCredit SEE/EE countries of operation in focus
ProCredit SEE/EE countries of operation in focus North Selected metrics per country Bulgaria Serbia Kosovo Romania Macedonia Real GDP growth 2023E 3.0% 2.7% 3.5% 3.0% 3.1% 2024 – 26E 3.2% 4.0% 3.8% 3.8% 3.6% CPI inflation 2023E 5.2% 8.3% 5.0% 4.5% 11.0% 2024 – 26E 2.1% 3.6% 2.2% 2.2% 3.1% Country /
Slide 23: Loan portfolio quality
Loan portfolio quality ► Stage 3 loans increased by 0.8 pp to 3.1%, group without Ukraine at 2.2% IFRS 9 Stage 3 loans in PCB Ukraine at 9.8%, EUR 57m stage transfers within Ukrainian portfolio since Dec-21 Net 0.1% 0.1% 0.1% write-offs In remaining ProCredit banks, share of Stage 3 loans furthe
Slide 24: Regulatory capital and risk-weighted assets
Regulatory capital and risk-weighted assets in EUR m Dec-21 Sep-22 ► Capital ratios well above regulatory capital requirements CET1 capital 792 839 (8.2% CET1 capital, 10.1% T1, 12.6% total capital) Additional Tier 1 capital 0 0 Tier 1 capital 792 839 ► CET1 capital includes profits of FY 2021 as we
Slide 25: Development of CET1 capital ratio (fully loaded)
Development of CET1 capital ratio (fully loaded) Increase in placements at local central banks due Mainly driven by attribution of Increasing equity on the level of the ProCredit to strong deposit growth; per CRR, placements at certain guarantees to the banks due to steady profit generation leading
Slide 26: Agenda
Agenda A Highlights B Group results C Segment performance D Asset quality and capital Q&A Appendix ProCredit Group | Q3 2022 results | Frankfurt am Main, 10 November 2022
Slide 27: Q&A
Q&A Photovoltaic project financed by ProCredit Bulgaria
Slide 28: Agenda
Agenda A Highlights B Group results C Segment performance D Asset quality and capital Q&A Appendix ProCredit Group | Q3 2022 results | Frankfurt am Main, 10 November 2022
Slide 29: ProCredit – A unique approach to banking
ProCredit – A unique approach to banking Summary Key figures 9M 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 8,672m EUR 6,292m 95% ► Headquartered in Frankfurt an
Slide 30: Overview of quarterly financial development
Overview of quarterly financial development In EUR m Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Net interest income 58.2 60.6 60.2 64.7 67.2 Net fee and commission income 13.0 13.8 12.6 13.7 14.0 Other operating income (net) 4.0 2.9 4.9 4.2 5.2 Operating income 75.2 77.4 77.7 82.5 86.4 Income Personnel expenses
Slide 31: Segment South Eastern Europe
Segment South Eastern Europe Regional loan portfolio breakdown Key financial data Bosnia & Albania (in EUR m) 9M 2021 9M 2022 Herzegovina 6% 6% Net interest income 95.2 111.6 Romania Bulgaria 8% 32% Net fee and commission income 23.3 25.8 Other operating income (net) 1.8 8.3 North Operating income 1
Slide 32: Segment Eastern Europe
Segment Eastern Europe Regional loan portfolio breakdown Key financial data Moldova (in EUR m) 9M 2021 9M 2022 14% Net interest income 51.0 59.9 Net fee and commission income 5.5 5.0 Other operating income (net) 3.8 6.6 Ukraine Operating income 60.3 71.5 53% Georgia Personnel expenses 9.5 12.3 33% A
Slide 33: Segment South America
Segment South America Regional loan portfolio breakdown Key financial data (in EUR m) 9M 2021 9M 2022 Net interest income 14.2 19.3 Net fee and commission income -0.3 0.0 Other operating income (net) -0.9 -1.6 Ecuador 100% Operating income 12.9 17.7 Personnel expenses 4.2 5.2 Admininistrative expens
Slide 34: Development of green loan portfolio
Development of green loan portfolio Green loan portfolio growth ► Green loan portfolio amounting to EUR 1.2bn, representing 19.7% of total loan portfolio 12.6% 15.4% 16.6% 18.7% 19.0% 19.7% 1,128 1,241 Q3-22 growth of EUR 39m, YTD of EUR 113m or 10.0% 52 985 36 795 21 ► Includes financing of inves
Slide 35: 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% 35% 52% 14% 13% 27% < 50k 50-250k 250-500k 500k-1.5m >1.5m EUR USD Other Currencies ProCredit Group | Q3 2022 results | Frankfurt am Main, 10 November 2022 34
Slide 36: 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 37: Funding and rating
Funding and rating Funding sources overview ► Highly diversified funding structure and counterparties 3% 1%1% 18% ► Customer deposits main funding source, accounting for 76%, supplemented by long-term funding from IFIs and institutional Customer deposits investors Liabilities to banks Debt securitie
Slide 38: Liquidity update
Liquidity update Liquidity coverage ratio ► Q3 increase in HLAs by EUR 241m, primarily driven by increased deposits 149% 154% 153% 100% 100% 100% ► LCR and NSFR remain comfortably above the regulatory minimum ► Further improved liquidity indicators of PCB Ukraine during Q3; with the bank having suff
Slide 39: Asset reconciliation
Asset reconciliation 10% Other assets 19% Cash and cash equivalents 70% Net loans to (in EUR m) customers ProCredit Group | Q3 2022 results | Frankfurt am Main, 10 November 2022 38
Slide 40: Liabilities and equity reconciliation
Liabilities and equity reconciliation 16% Liabilities to banks Liabilities to customers 69% (in EUR m) Debt 1%3% securities 10% Equity ProCredit Group | Q3 2022 results | Frankfurt am Main, 10 November 2022 39
Slide 41: Balance sheet
Balance sheet in EUR m Dec-21 Sep-22 Assets Cash and central bank balances 1,546 1,677 Loans and advances to banks 253 255 Investment securities 410 406 Loans and advances to customers 5,924 6,292 Loss allowance for loans to customers -131 -202 Derivative financial assets 1 13 Property, plant and eq
Slide 42: Income statement by segment
Income statement by segment 01.01.- 30.09.2022 South Eastern Germany Eastern Europe South America Consolidation Group (in EUR m) Europe Interest and similar income 17.6 104.4 136.4 33.3 -16.8 274.7 of which inter-segment 15.4 0.7 0.3 0.0 0.0 0.0 Interest and similar expenses 16.3 44.4 24.8 13.9 -16.
Slide 43: 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 share of credit-impaired loans(7) is the most significant indicator to and manage the implementation and further development of the group’s assess portfolio quality busi
Slide 44: Contact Investor Relations
Contact Investor Relations Financial calendar (continuously updated on IR Website) Date Place Event information 28. - 30.11.2022 Frankfurt/ Main Deutsches Eigenkapitalforum 2022 Investor Relations Media Relations ProCredit Holding AG & Co. KGaA ProCredit Holding AG & Co. KGaA Investor Relations Team
Slide 45: 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