Procredit Holding Ag · XETR:PCZ
Procredit — FY2018 Earnings Presentation
41 slides from Procredit's earnings presentation, Mar 27, 2019
Slide 1: Q4/FY 2018 results
Borislav Kostadinov, Member of the Management Board Christian Dagrosa, Head of Controlling Q4/ FY 2018 results Frankfurt am Main, 27 March 2019
Slide 2: ProCredit – A unique approach to banking
ProCredit – A unique approach to banking Summary Key figures FY 2018 and FY 2017 ► A profitable, development-oriented commercial group of banks for Total assets Customer loan portfolio Deposits/loans(1) SMEs with a focus on South Eastern Europe and Eastern Europe EUR 5,966m EUR 4,392m 87% ► Headquar
Slide 3: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q4 2018 results | Frankfurt am Main, 27 March 2019 2
Slide 4: Where are we coming from? Significant progress since 2013
Where are we coming from? Significant progress since 2013 Focused growth in SME loan categories(1) Decrease in overall branch network Decrease in number of total group staff 645 86% 80% 11,514 328 46% 117 317 87 3,323 2,971 71 46 46 41 Dec-13 Dec-17 Dec-18 Dec-13 Dec-17 Dec-18 Number of service poin
Slide 5: Key achievements 2018
Key achievements 2018 Execution of “Hausbank” business client strategy ► Strengthened track record to grow with good portfolio quality ► Successful positioning as Hausbank for SMEs driving growth of transaction and deposit volumes Execution of ProCredit Direct private client strategy ► Fully impleme
Slide 6: 2018 results versus guidance
2018 results versus guidance Guidance Actuals Commentary 2018 2018 Continued strong growth in the ► Growth of the loan portfolio(1) 12 – 15% 12.3% SME segment Includes result from discontinued ► Return on average equity (RoAE) 7.5 – 8.5% 7.6% operations of EUR -4.6m Slightly above guidance, affe
Slide 7: Strong volume growth in loan portfolio
Strong volume growth in loan portfolio FY 2018 +12% Initial loan size (in EUR) FY +8% 2017 Initial loan size (in EUR) Note: Gross Loan volume growth split by initial loan size in all segments; FY 2017: restated from outstanding principal to gross loan portfolio 6 ProCredit Group | Q4 2018 results |
Slide 8: ProCredit is committed to foster the SDGs
ProCredit is committed to foster the SDGs 7 Goals for Sustainable Development (SDG) where we contribute the most Our efforts Our targets ► E&S Standards and Exclusion List: ► 20% green loans in our portfolio Ensures high social, moral and ecological standards in all our business relations ► Become c
Slide 9: Outlook for ProCredit Group 2019
Outlook for ProCredit Group 2019 ► Growth of the loan portfolio 10 – 13%(1) ► Profit for the period EUR 48 – 55m ► Cost-income ratio (CIR) < 70% ► CET1 ratio > 13% ► Dividend payout ratio 1/3 of profits In the medium term, assuming a stable political, economic and operating environment, we see poten
Slide 10: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q4 2018 results | Frankfurt am Main, 27 March 2019 9
Slide 11: Q4 / FY 2018 results at a glance
Q4 / FY 2018 results at a glance In EUR m FY 2017 FY 2018 Q3-2018 Q4-2018 y-o-y Net interest income 204.7 189.8 48.0 48.1 -7% Provision expenses 4.8 -3.9 0.2 -4.4 -181% Net fee and commission income 45.8 52.2 13.3 14.8 14% Net result of other operating income 2.7 2.1 1.5 1.0 -24% Operating income 24
Slide 12: Net interest income
Net interest income ► Net interest income largely stable in Q4, showing an overall positive trend throughout the year, which is further 3.9% characterised by a stabilisation of the net interest margin 3.4% 3.4% 3.3% 3.3% ► Trend is above all driven by interest income from loans to 51.7 customers, wh
Slide 13: Provisioning expenses
Provisioning expenses ► Financial performance in 2018 supported by the very solid 4 bps risk profile, which maintained loan loss provisioning expenses at extraordinarily low levels 0.4 ► Credit impaired loans decreased to 3.1%, a substantial 1 bps improvement compared to the previous year (in EUR m)
Slide 14: Net fee and commission income
Net fee and commission income ► Net fee and commission income increased steadily quarter 14.8 by quarter 13.3 12.5 12.6 ► YoY, increase in net fee and commission income of more 11.4 than EUR 6 million ► Direct banking strategy as major driver behind positive development of net fee income ► Fee incom
Slide 15: Operating expenses
Operating expenses ► YoY decrease in operating expenses of more than EUR 15m 75.4% 71.4% 71.6% 70.4% 67.5% ► Reduction primarily driven by cost items related to administration of branch network and personnel, facilitated 20.3 20.6 by direct banking strategy 19.5 19.3 20.4 ► Q4 increase in operating
Slide 16: Contribution of segments to group net income FY 2018
Contribution of segments to group net income FY 2018 Group functions, e.g. risk management, reporting, capital management, IT, liquidity management, training and development Includes ProCredit Holding, Quipu, ProCredit Academy Fürth, ProCredit Bank Germany (EUR 76m customer loan portfolio; EUR 272m
Slide 17: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q4 2018 results | Frankfurt am Main, 27 March 2019 16
Slide 18: Structure of the loan portfolio
Structure of the loan portfolio Loan portfolio by geographical segments Loan portfolio by sector South America: Germany: Private loans: Business loans: 6% 2% 92% 1%2% 7% 1% 0% 5% Eastern Europe: 2% 19% South Eastern 22% Europe: 8% 70% 27% 16% 12% 17% 5% 4% 4% 20% 6% 12% 23% 8% Bulgaria Serbia Kosovo
Slide 19: Structure of the loan portfolio (continued)
Structure of the loan portfolio (continued) Loan portfolio by initial loan size Loan portfolio by currency 11% 14% 36% 20% 52% 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 (EUR 4,39
Slide 20: Loan portfolio quality
Loan portfolio quality IAS 39 IFRS 9 ► Substantially improved portfolio quality in 2018, as volume of stage 3 loans reduced by EUR 50m or 27% YoY Net write- offs(1)(5) 0.4% 0.4% 0.5% Coverage ► Reduced share of impaired loans of 1.7 pp amid impaired 70.0% 84.6% 90.8% portfolio(2) continuously low wr
Slide 21: 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 22: Development of green loan portfolio
Development of green loan portfolio Green loan portfolio growth 4.0% 6.4% 9.1% 12.6% 15.4% ► Strong growth in the green loan portfolio (+39% yoy) 678 ► Includes financing of investments in 15 • Energy efficiency 489 14 • Renewable energies 331 264 15 662 • Other environmentally-friendly activities 1
Slide 23: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q4 2018 results | Frankfurt am Main, 27 March 2019 22
Slide 24: Asset reconciliation
Asset reconciliation Other 12% assets Cash and 16% cash equivalents 72% Net loans to customers (in EUR m) ProCredit Group | Q4 2018 results | Frankfurt am Main, 27 March 2019 23
Slide 25: Liabilities and equity reconciliation
Liabilities and equity reconciliation Increase in deposits in spite of substantial restructuring and Capital increase in February closing of branches 2018, IFRS 9 effect and capitalised profits IFI and bank funding as a stable and long-term source to support the dynamic growth in our portfolio Liabi
Slide 26: Liquidity update
Liquidity update Liquidity coverage ratio 187% ► Level of HLAs further increased by EUR 36m in Q4 179% ► Increase primarily driven by strong deposit growth 100% 80% ► LCR comfortably above regulatory minimum Dec-17 Dec-18 LCR ratio Regulatory minimum Highly liquid assets (HLA) and HLA ratio 29% 27%
Slide 27: Regulatory capital and risk-weighted assets
Regulatory capital and risk-weighted assets Overview of capitalisation ► Increases in CET1, total capital and leverage ratios due to in EUR m Dec-17 Dec-18 the capital increase in Feb-18 CET1 capital 595 678 Additional Tier 1 capital 0 0 ► Profits up to Q3 2018 recognised Tier 1 capital 595 678 Tier
Slide 28: Development of CET1 capital ratio (fully loaded)
Development of CET1 capital ratio (fully loaded) Leverage ratio 11.0% Leverage ratio 10.5% ProCredit Group | Q4 2018 results | Frankfurt am Main, 27 March 2019 27
Slide 29: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q4 2018 results | Frankfurt am Main, 27 March 2019 28
Slide 30: Q&A
Q&A ProCredit Bank Georgia ProCredit Group | Q4 2018 results | Frankfurt am Main, 27 March 2019 29
Slide 31: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q4 2018 results | Frankfurt am Main, 27 March 2019 30
Slide 32: Overview of quarterly financial development
Overview of quarterly financial development In EUR m Q4-2017 Q1-2018 Q2-2018 Q3-2018 Q4-2018 Net interest income 51.7 46.6 47.1 48.0 48.1 Provision expenses -0.1 -0.1 0.4 0.2 -4.4 Net fee and commission income 12.5 11.4 12.6 13.3 14.8 Net result of other operating income -2.5 1.0 -1.5 1.5 1.0 Operat
Slide 33: Segment South Eastern Europe
Segment South Eastern Europe Regional loan portfolio breakdown Key financial data Bosnia (in EUR m) FY 2017 FY 2018 Albania 6% 7% Net interest income 131.1 115.4 Bulgaria 27% Romania Provision expenses 0.2 -0.5 8% Net fee and commission income 31.3 36.1 Net result of other operating income -2.6 -1.0
Slide 34: Segment Eastern Europe
Segment Eastern Europe Regional loan portfolio breakdown Key financial data Moldova (in EUR m) FY 2017 FY 2018 11% Net interest income 55.9 56.3 Provision expenses 6.0 -1.8 Net fee and commission income 8.8 9.3 Net result of other operating income 3.2 3.3 Operating income 62.0 70.7 Ukraine Georgia 5
Slide 35: Segment South America
Segment South America Regional loan portfolio breakdown Key financial data Colombia (in EUR m) FY 2017 FY 2018 16% Net interest income 20.3 17.6 Provision expenses -1.4 -1.7 Net fee and commission income -0.1 -0.1 Net result of other operating income 1.2 1.5 Operating income 22.8 20.6 Operating expe
Slide 36: Funding and rating update
Funding and rating update Funding sources overview 4% 3%1% 4% ► Highly diversified funding structure and counterparties ► Customer deposits main funding source, accounting for 73% as Customer deposits of Dec-18 15% Liabilities to IFIs Liabilities to banks ► Supplemented by long-term funding from IFI
Slide 37: Balance sheet
Balance sheet in EUR m Dec-17 Dec-18 Assets Cash and central bank balances 1,077 964 Loans and advances to banks 196 212 Investment securities 0 297 Available-for-sale financial assets 215 0 Loans and advances to customers 3,910 4,392 Allowance for losses on loans and advances to customers -129 -124
Slide 38: Income statement by segment
Income statement by segment 01.01.- 31.12.2018 South Eastern Germany Eastern Europe South America Consolidation Group (in EUR m) Europe Interest and similar income 20.6 107.9 141.0 28.1 -19.2 278.4 of which inter-segment 19.1 0.2 -0.1 0.0 0.0 0.0 Interest and similar expenses 20.5 51.6 25.5 10.5 -19
Slide 39: Information regarding financial figures in this presentation
Information regarding financial figures in this presentation FY 2018: ► Financial data for the fiscal year ended 31 December 2018, as shown in the consolidated financial statements as of and for the fiscal year ended 31 December 2018. Q3 2018: ► Financial data for nine-month period ended 30 Septembe
Slide 40: Contact Investor Relations
Contact Investor Relations Contact details Financial calendar Investor Relations Date Place Event information Quarterly Statement as of 31 March 2019 ProCredit Holding AG & Co. KGaA 13.05.2019 16:00 CEST Analyst Conference Call Nadine Frerot 17.05.2019 Frankfurt/Main Annual General Meeting tel.: +49
Slide 41: 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