Procredit Holding Ag · XETR:PCZ
Procredit — Q2 2019 Earnings Presentation
40 slides from Procredit's earnings presentation, Aug 14, 2019
Slide 1: Q2 2019 results
Dr Gabriel Schor, Member of the Management Board Helen Alexander, Investor Relations Christian Dagrosa, Controlling and Investor Relations Q2 2019 results Frankfurt am Main, 14 August 2019
Slide 2: ProCredit – A unique approach to banking
ProCredit – A unique approach to banking Summary Key figures H1 2019 ► A profitable, development-oriented commercial group of banks for SMEs with a focus on South Eastern Europe and Eastern Europe Total assets Customer loan portfolio Deposits/loans(1) EUR 6,122m EUR 4,567m 84% ► Headquartered in Fra
Slide 3: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q2 2019 results | Frankfurt am Main, 14 August 2019 2
Slide 4: Highlights Q2 2019
Highlights Q2 2019 Continued good business growth with target SMEs ► 3.3% growth in customer loans (5.0% ytd) • only minor reduction of very small loans confirming end of transition phase ► Continuously high portfolio quality • Reduction of default portfolio to 2.9% • Improved coverage of default po
Slide 5: Impact highlights Q2 2019
Impact highlights Q2 2019 Fostering entrepreneurs and SMEs Responsible banking Environmental responsibility ► Raised additional EUR 800 million (to ► Transparent, modern banking: ► Successful placement of pioneering reach EUR 1.6 billion) for InnovFin • Execution of PC Direct green private bond with
Slide 6: Solid volume growth in loan portfolio
Solid volume growth in loan portfolio H1 2019 Total growth: EUR 217.4m 5.0% (in EUR m) Total growth: EUR 484.1m 12.5% FY 2018 (in EUR m) Note: Gross Loan volume growth split by initial loan size in all segments; (*) Gross Loan portfolio without Ardec and Colombia ProCredit Group | Q2 2019 results |
Slide 7: Positive trends with execution of ProCredit Direct
Positive trends with execution of ProCredit Direct ► Steady, balanced growth in deposit volume achieved on efficient, scalable operating cost base created by our ProCredit Direct strategy • 2.4% growth in deposits in Q2 (1.7% ytd) ► Introduction of ProCredit Direct and the decline in branch infrastr
Slide 8: H1 results versus guidance
H1 results versus guidance Guidance Actuals 2019 H1 2019 ► Growth of the loan portfolio 10 – 13%(1) 5.0% ► Profit for the period EUR 48 – 55m EUR 22.9m ► Cost-income ratio (CIR) < 70% 70.7% ► CET1 ratio > 13% 14.3% ► Dividend payout ratio 1/3 of profits 1/3 of profits In the medium term, assuming a
Slide 9: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q2 2019 results | Frankfurt am Main, 14 August 2019 8
Slide 10: H1 2019 results at a glance
H1 2019 results at a glance In EUR m H1-2018 H1-2019 Q2-2018 Q2-2019 y-o-y Net interest income 92.1 92.7 46.2 47.3 0.5 Provision expenses -0.1 4.1 0.3 2.0 4.2 Net fee and commission income 24.0 25.8 12.6 13.1 1.8 Net result of other operating income -0.2 -0.4 -1.2 -1.3 -0.2 Operating income 116.1 11
Slide 11: Net interest income
Net interest income ► Increased net interest income in Q2 (+EUR 1.9m QoQ) on 3.4% 3.3% the back of solid loan growth and slightly increased net 3.2% 3.1% 3.1% interest margin ► Underlying trends in interest income are overall positive with steady increases in portfolio size as the major driver 46.2
Slide 12: Provisioning expenses
Provisioning expenses ► Loan loss provisioning expenses at extraordinarily low 19 bps 18 bps levels throughout 2018, driven by improvements in portfolio quality and strong recoveries (in EUR m) ► Normalization of expenses in 2019, with portfolio quality 0.3 2.1 2.0 further improving 3 bps -0.1 -4.5
Slide 13: Net fee and commission income
Net fee and commission income ► Increase of EUR 0.4m qoq achieved through increased 14.8 transactions 13.3 13.1 12.6 12.7 ► Increase in half-year net fee and commission income of more than EUR 1.8 million yoy ► Direct banking strategy as major driver behind positive development of net fee income ► F
Slide 14: Operating expenses
Operating expenses ► Year-on-year Increase in general and administrative 70.6% 71.4% 69.8% 71.6% 67.3% expenses above all related to higher marketing activities for direct banking offer 20.3 ► Q2 cost-income ratio elevated partly due to seasonal 19.9 19.1 19.6 effects, e.g. the one-time recognition
Slide 15: Contribution of segments to group net income H1 2019
Contribution of segments to group net income H1 2019 Group functions, e.g. risk management, reporting, capital management, IT, Includes above all expected liquidity management, training and development losses from the planned disposal of PCB Colombia Includes ProCredit Holding, Quipu, ProCredit Acad
Slide 16: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q2 2019 results | Frankfurt am Main, 14 August 2019 15
Slide 17: Structure of the loan portfolio
Structure of the loan portfolio Loan portfolio by geographical segments Loan portfolio by sector South America: Germany: 6% 1% Private loans: Business loans: 7% 93% 6% 1% 6% 1% Eastern Europe: South Eastern 3% 23% 20% Europe: 7% 71% 27% 17% 13% 5% 17% 4% 4% 21% 6% 23% 11% 8% Wholesale and retail tra
Slide 18: Structure of the loan portfolio (continued)
Structure of the loan portfolio (continued) Loan portfolio by initial loan size Loan portfolio by currency 11% 13% 35% 21% 53% 37% 18% 12% < 50k 50-250k 250-500k 500k-1.5m >1.5m EUR USD Other currencies Notes: Loan portfolio by initial loan size and by currency in % of gross loan portfolio, continue
Slide 19: Loan portfolio quality
Loan portfolio quality IFRS 9 ► Share of default loans improved by 20bp Net write- 0.4% 0.4% 0.1% offs(1)(5) ► Increased coverage of impaired loan to almost 95% Coverage impaired 84.6% 90.8% 94.9% portfolio(2) ► Net write-off ratio of 0.1% in line with the group’s long Coverage ratio track record of
Slide 20: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q2 2019 results | Frankfurt am Main, 14 August 2019 19
Slide 21: Asset reconciliation
Asset reconciliation Other 11% assets 1% Assets held for sale Cash and cash 15% equivalents (in EUR m) 73% Net loans to customers ProCredit Group | Q2 2019 results | Frankfurt am Main, 14 August 2019 20
Slide 22: Liabilities and equity reconciliation
Liabilities and equity reconciliation Liabilities 17% to banks and IFIs (in EUR m) Liabilities to 63% customers Debt securities 4% 1% Other liabilities 2% Subordinated Equity debt 12% ProCredit Group | Q2 2019 results | Frankfurt am Main, 14 August 2019 21
Slide 23: Liquidity update
Liquidity update Liquidity coverage ratio 187% ► Q2 level of HLAs remained stable 161% 151% 100% 100% 100% ► Increase in HLA of approximately EUR 100m yoy ► LCR remained comfortably above the regulatory minimum at all times Jun-18 Dec-18 Jun-19 LCR ratio Regulatory minimum Highly liquid assets (HLA)
Slide 24: Regulatory capital and risk-weighted assets
Regulatory capital and risk-weighted assets Overview of capitalisation ► Minor decrease in CET1 ratio due to increase in Credit Risk in EUR m Dec-18 Jun-19 RWAs CET1 capital 678 696 Additional Tier 1 capital 0 0 ► Decrease in total capital ratio due to early repayment of Tier 1 capital 678 696 subor
Slide 25: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q2 2019 results | Frankfurt am Main, 14 August 2019 24
Slide 26: Q&A
Q&A ProCredit Bank Georgia ProCredit Group | Q2 2019 results | Frankfurt am Main, 14 August 2019 25
Slide 27: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q2 2019 results | Frankfurt am Main, 14 August 2019 26
Slide 28: Overview of quarterly financial development
Overview of quarterly financial development In EUR m Q2-2018 Q3-2018 Q4-2018 Q1-2019 Q2-2019 Net interest income 46.2 47.2 46.9 45.4 47.3 Provision expenses 0.3 -0.1 -4.5 2.1 2.0 Net fee and commission income 12.6 13.3 14.8 12.7 13.1 Net result of other operating income -1.2 1.3 1.2 0.9 -1.3 Operati
Slide 29: Segment South Eastern Europe
Segment South Eastern Europe Regional loan portfolio breakdown Key financial data Bosnia Albania (in EUR m) H1 2018 H1 2019 6% 6% Net interest income 58.2 54.4 Bulgaria Romania 27% Provision expenses 0.0 3.0 9% Net fee and commission income 16.6 18.1 Net result of other operating income -2.6 -2.3 No
Slide 30: Segment Eastern Europe
Segment Eastern Europe Regional loan portfolio breakdown Key financial data Moldova (in EUR m) H1 2018 H1 2019 11% Net interest income 27.8 30.2 Provision expenses -0.2 1.8 Net fee and commission income 4.3 4.7 Net result of other operating income 1.5 2.0 Operating income 33.7 35.0 Georgia 32% Ukrai
Slide 31: Segment South America
Segment South America Regional loan portfolio breakdown Key financial data (in EUR m) H1 2018 H1 2019 Net interest income 7.2 7.8 Provision expenses 0.0 -0.7 Net fee and commission income -0.2 -0.1 Net result of other operating income 1.4 -0.4 Operating income 8.3 7.9 Operating expenses 7.9 7.9 Oper
Slide 32: Development of green loan portfolio
Development of green loan portfolio Green loan portfolio growth ► Strong growth in the green loan portfolio of 5.3% in Q2 19 9.1% 12.6% 15.4% 15.6% 712 678 17 ► Includes financing of investments in 15 489 • Energy efficiency 14 331 695 • Renewable energies 15 662 (in EUR m) 475 • Other environmental
Slide 33: 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 34: Development of CET1 capital ratio (fully loaded)
Development of CET1 capital ratio (fully loaded) Leverage ratio Leverage ratio 11.0% 11.0% ProCredit Group | Q2 2019 results | Frankfurt am Main, 14 August 2019 33
Slide 35: Funding and rating update
Funding and rating update Funding sources overview 2% 2% 5% ► Highly diversified funding structure and counterparties 4% ► Customer deposits main funding source, accounting for 72% as Customer deposits of Jun-19 15% Liabilities to IFIs ► Supplemented by long-term funding from IFIs and institutional
Slide 36: Balance sheet
Balance sheet in EUR m Jun-19 Dec-18 Assets Cash and central bank balances 945 964 Loans and advances to banks 191 212 Investment securities 256 297 Available-for-sale financial assets 0 0 Loans and advances to customers 4,567 4,392 Allowance for losses on loans and advances to customers -124 -124 D
Slide 37: Income statement by segment
Income statement by segment 01.01.- 30.06.2019 South Eastern Germany incl. Eastern Europe South America Group (in EUR m) Europe Consolidation Interest and similar income 62.1 70.2 12.7 -0.2 144.8 of which inter-segment 0.4 0.0 0.0 10.6 0.0 Interest and similar expenses 31.9 15.8 4.9 -0.5 52.1 of whi
Slide 38: Information regarding financial figures in this presentation
Information regarding financial figures in this presentation Q2 2019: ► Financial data for six-month period ended 30 June 2019, as shown in the unaudited quarterly financial report ended 30 June 2019. Q1 2019: ► Financial data for three-month period ended 31 March 2019, as shown in the unaudited qua
Slide 39: Contact Investor Relations
Contact Investor Relations Contact details Financial calendar Investor Relations Date Place Event information Interim Report as of 30 June 2019 ProCredit Holding AG & Co. KGaA 14.08.2019 16:00 CEST Analyst Conference Call Christian Dagrosa 02.09. - tel.: +49 69 951 437 0 Frankfurt/Main Equity Forum
Slide 40: 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