Procredit Holding Ag · XETR:PCZ
Procredit — FY2023 Earnings Presentation
48 slides from Procredit's earnings presentation, May 14, 2024
Slide 1: Q4 2023 / FY 2023 results
Hubert Spechtenhauser, Chairman of the Management Board Christian Dagrosa, CFO and member of the Management Board Q4 2023 / FY 2023 results Frankfurt am Main, March 2024 (updated as of 14th May 2024)
Slide 2: Agenda
A. Highlights and business update B. Group results C. Regional performance D. Outlook ProCredit Group | Q4 / FY 2023 results | Frankfurt am Main, 20 March 2024 1
Slide 3: Highlights FY 2023
Highlights FY 2023 Strong performance as starting point for ambitious new medium-term outlook Strong FY-23 result with 12.2% return on equity; all group banks in SEE/EE with enhanced performance 12.2% ► Profit of EUR 113.4m, representing the highest group result since its stock exchange listing retu
Slide 4: FY 2023 results versus updated guidance
FY 2023 results versus updated guidance Updated guidance Actual FY 2023 FY 2023 1.9% ► Growth of the loan portfolio Lower to medium single digit percentage growth (2.3% fx-adjusted) Around 12% 12.2% ► Return on equity (RoE) (with margin of +/- 1 ppt, based on up to 30bps cost of risk) (with cost of
Slide 5: 2023 sustainability highlights and developments
2023 sustainability highlights and developments INTERNAL GREEN LENDING CLIENTS JOBS SUPPORTED EMPLOYEES ENVIRONMENTAL THROUGH OUR INDICATORS BUSINESS CLIENTS 61% 9,439 total number of business loan clients total number of employees 193,344 electric and hybrid total number of green loans 32,244 plug-
Slide 6: Steady development of customer loans amid global challenges
Steady development of customer loans amid global challenges Loan portfolio growth ► Customer loans increase by EUR 119m or 1.9% (fx-adjusted 1.9% YoY growth: 2.3%) 0.0% QoQ Renewable energy loan portfolio grows by a strong 14.9% 6,108 6,226 6,226 and in a highly granular way; over 50% of total loa
Slide 7: Strong deposit development through digital banking channels
Strong deposit development through digital banking channels Deposit growth ► Customer deposits increase by a strong EUR 965m or 15.3% 15.3% YoY Growth driven by both private individual and MSME clients 4.6% QoQ and well diversified across banks, demonstrating progress of ProCredit Direct strategy
Slide 8: Strategic group positioning on SEE/EE, with positive expected GDP development
Strategic group positioning on SEE/EE, with positive expected GDP development and increased international focus on the region GDP outlook for SEE/EE remains intact, well above Euro area Macroeconomic environment / key current themes SEE/EE, incl. Ukraine(1) Euro area • 2024 median GDP growth in SEE/
Slide 9: B. Group results
A. Highlights and business update B. Group results C. Regional performance D. Outlook ProCredit Group | Q4 / FY 2023 results | Frankfurt am Main, 20 March 2024 8
Slide 10: Operating income and expense overview
Operating income and expense overview Operating income ► Strong increase in operating income yoy by 21%, to EUR 413m 21.4% 19.5% Very strong dynamic of NII (up 27% yoy), but also fx-income 412.5 111.4 339.8 (up 17% yoy) and net fee income (up 5% yoy) with strong 93.2 positive development (in EUR m
Slide 11: Net interest income
Net interest income Quarterly development ► Qoq, NII further increased by EUR 3.6m or 4.0% to EUR 92.6m 3.9% 3.8% 3.6% 3.3% 3.4% 89.0 92.6 NIM marginally reduced by 4bp to 3.8%, indicating peak in 75.4 80.2 net-positive re-pricing dynamic 72.6 15.4 16.9 12.6 11.9 12.6 Strong deposit growth incre
Slide 12: Net fee and commission income
Net fee and commission income Quarterly development ► Q4-23 net fee and commission income on steady level of 14.3m 14.5 14.9 14.4 14.3 14.0 ► FY-23 net fee and commission income of EUR 57.6m, up EUR 1.3 1.2 1.2 1.1 1.3 2.8m or 5.1% yoy Well diversified, structural increase in revenue streams, with
Slide 13: Personnel and administrative expenses
Personnel and administrative expenses Quarterly development 72.6% ► Q4-23 cost-income ratio at seasonally elevated level of 62.9% 62.9% 59.7% 59.7% 57.1% 61.8% Increase in personnel and administrative costs qoq driven by 67.7 70.1 62.4 higher staff numbers, investments in marketing and IT as 58.6
Slide 14: Loss allowance
Loss allowance Quarterly development ► Q4-23 loss allowance of EUR 6.5m, resulting in FY-23 loss allowance of EUR 15.5m or 25 bps cost of risk 164 bps 12 bps -9 bps 55 bps 42 bps Previous year includes consequential provisioning in Ukraine as well as significant management overlays outside Ukraine
Slide 15: Loan portfolio quality
Loan portfolio quality Loan portfolio by geography Net-write offs (annualised) Ecuador Germany Moldova8% 1% 3% Bulgaria 0.2% 0.2% 0.1% 0.4% 0.5% Georgia 24% 6% Ukraine 8% Stage 2 Albania 4% 8.8% 9.1% Bosnia & Serbia 7.3% 7.5% 7.0% Herzegovina 15% 5.5% 5.9% 5.3% 5% 4.6% 4.5% Romania 6% North Kosovo M
Slide 16: Regulatory capital, risk-weighted assets, capital ratios
Regulatory capital, risk-weighted assets, capital ratios Capitalisation overview ► CET1 ratio increased to 14.3%, up 0.8 pp from Dec-22 in EUR m Dec-22 Dec-23 CET1 capital 820 885 Capital ratios well above regulatory capital requirements of Additional Tier 1 capital 0 0 9.2% CET1, 11.4% Tier 1, 14
Slide 17: C. Regional performance
A. Highlights and business update B. Group results C. Regional performance D. Outlook ProCredit Group | Q4 / FY 2023 results | Frankfurt am Main, 20 March 2024 16
Slide 18: Contribution of regional segments to group net income
Contribution of regional segments to group net income 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 43m loan portfolio; EUR 278m deposits) (FY-23, i
Slide 19: Segment South Eastern Europe
Segment South Eastern Europe Segment key financials SEE Individual bank development (FY-23) Operating income (€m) Cost-income ratio Country Profit after tax (€m) Cost-income Return on ratio equity +32% -3.4pp 264.9 57.8% Bulgaria 32.1 48.6% 15.7% 201.4 54.4% Kosovo 22.3 49.5% 20.8% Serbia 20.1 48.2%
Slide 20: Segment Eastern Europe
Segment Eastern Europe Segment key financials EE Individual bank development (FY-23) Operating income (€m) Cost-income ratio Country Profit after tax (€m) Cost-income Return on ratio equity +12% -7.2pp 56.8% Ukraine 17.7 32.4% 28.0% 111.7 99.7 51.1% 51.3% 43.9% 50.7 52.6 Georgia 16.3 50.9% 16.0% Mol
Slide 21: Update on ProCredit Bank Ukraine
Update on ProCredit Bank Ukraine Current status of operations Regional risk classification ► Safety of staff: Out of 334 staff, 9 are mobilized ► Banking operations continue uninterrupted – as they have since beginning of the war ► Bank is increasing capacity, with staff numbers up by 9% yoy ► Conti
Slide 22: D. Outlook
A. Highlights and business update B. Group results C. Regional performance D. Outlook ProCredit Group | Q4 / FY 2023 results | Frankfurt am Main, 20 March 2024 21
Slide 23: FY 2024 and medium-term outlook
FY 2024 and medium-term outlook FY 2024 outlook ► Growth of the loan portfolio Around 10% (FX adjusted) ► Return on equity (RoE) 10% – 12% (based on up to 40bps cost of risk) ► Cost-income ratio (CIR) Around 63% (with margin of +/- 1 ppt) > 13.0% CET1 ratio, c. 9% leverage ratio, ► CET1 ratio, lever
Slide 24: Q&A
Q&A Photovoltaic project financed by ProCredit Bulgaria
Slide 25: Appendix A. Impact reporting
Appendix A. Impact reporting B. P&L and balance sheet C. Loan portfolio D. Information on segment and bank level E. Capital, liquidity and other information ProCredit Group | Q4 / FY 2023 results | Frankfurt am Main, 20 March 2024 24
Slide 26: Opening of ProEnergy solar park located in Kosovo
Opening of ProEnergy solar park located in Kosovo Milestone in achieving group climate neutrality Opening of group-owned PV park, located in Kosovo Consistent progress towards group climate neutrality… Mid-term group target of climate neutrality announced (2018) 3 MWp 450 c. 90% production via equ
Slide 27: Conversion of legal form into stock corporation (AG)
Conversion of legal form into stock corporation (AG) Successful completion in September 2023 Strong project execution on earliest possible timeline Strategic rationale Conversion embedded in the ongoing 14-Oct 2022 April 2023 05-Jun-23 27-Sep-23 strengthening of the corporate structure and capital
Slide 28: Continuous efforts to reduce our direct environmental footprint
Continuous efforts to reduce our direct environmental footprint ProCredit Bank headquarter first EDGE certified building in Ukraine EDGE certification in 2023 of headquarter of PCB Ukraine Consistent reduction of our direct environmental footprint… Savings calculated based on local 52% 45% 84 tons
Slide 29: Appendix B. P&L and balance sheet
Appendix A. Impact reporting B. P&L and balance sheet C. Loan portfolio D. Information on segment and bank level E. Capital, liquidity and other information ProCredit Group | Q4 / FY 2023 results | Frankfurt am Main, 20 March 2024 28
Slide 30: FY 2023 results at a glance
FY 2023 results at a glance In EUR m Q4-22 Q4-23 FY-22 FY-23 Y-o-Y Net interest income 72.6 92.6 264.6 337.2 72.6 Net fee and commission income 14.5 14.3 54.7 57.5 2.8 Other operating income (net) 6.2 4.5 20.5 17.8 -2.7 Operating income 93.2 111.4 339.8 412.5 72.7 Income Personnel expenses 29.2 32.9
Slide 31: Overview of quarterly financial development
Overview of quarterly financial development In EUR m Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Net interest income 72.6 75.4 80.2 89.0 92.6 Net fee and commission income 14.5 14.0 14.9 14.4 14.3 Other operating income (net) 6.2 4.3 2.9 6.0 4.5 Operating income 93.2 93.7 98.0 109.4 111.4 Income Personnel expense
Slide 32: Balance sheet
Balance sheet in EUR m Dec-22 Dec-23 Assets Cash and central bank balances 1,940 2,348 Loans and advances to banks 280 372 Investment securities 480 751 Loans and advances to customers 6,108 6,226 Loss allowance for loans to customers -215 -197 Derivative financial assets 13 8 Property, plant and eq
Slide 33: Balance sheet development
Balance sheet development YTD asset development YTD liabilities and equity development (in EUR m) (in EUR m) ► Simple balance sheet structure with 63% of assets net loans to ► Liabilities and equity structure with 73% liabilities to customers, customers, 23% cash and cash equivalents and 14% other a
Slide 34: Appendix C. Loan portfolio
Appendix A. Impact reporting B. P&L and balance sheet C. Loan portfolio D. Information on segment and bank level E. Capital, liquidity and other information ProCredit Group | Q4 / FY 2023 results | Frankfurt am Main, 20 March 2024 33
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 10% 2% 36% 29% 52% 59% 12% Medium Small Very Small Private Individuals EUR USD Other Currencies ProCredit Group | Q4 / FY 2023 results | Frankfurt am Main, 20 March 2024 34
Slide 36: Development of green loan portfolio
Development of green loan portfolio Green loan portfolio growth ► Green loan portfolio amounting to EUR 1.3bn, representing 15.4% 20.4% 20.4% of total loan portfolio CAGR 2018-2023: 13% ► Includes financing of investments in: • Energy efficiency • Renewable energies 1,268 • Other environmentally-fri
Slide 37: Structure of collateral
Structure of collateral Collateral by type (FY 2023) ► Majority of collateral consists of mortgages ► Significant share of financial guarantees mainly as a result of InnovFin and other guarantee programmes provided by the European Investment Fund 1% 16% ► Clear, strict requirements for types of acce
Slide 38: Appendix D. Information on segment and bank level
Appendix A. Impact reporting B. P&L and balance sheet C. Loan portfolio D. Information on segment and bank level E. Capital, liquidity and other information ProCredit Group | Q4 / FY 2023 results | Frankfurt am Main, 20 March 2024 37
Slide 39: Income statement by segment
Income statement by segment South Eastern 01.01.- 31.12.2023 (in EUR m) Germany Eastern Europe South America Consolidation Group Europe Interest and similar income 53.9 175.0 292.5 50.6 -41.6 530.5 of which inter-segment 26.7 7.5 7.4 0.0 0.0 0.0 Interest and similar expenses 50.6 79.1 73.8 31.4 -41.
Slide 40: Segment South Eastern Europe
Segment South Eastern Europe Regional loan portfolio breakdown Key financial data Bosnia & Albania 6% Herzeg. 6% (in EUR m) FY-22 FY-23 Net interest income 154.4 218.7 Romania 8% Bulgaria 33% Net fee and commission income 35.1 36.8 North Other operating income (net) 12.0 9.4 Macedonia 11% Operating
Slide 41: Segment Eastern Europe
Segment Eastern Europe Regional loan portfolio breakdown Key financial data Moldova (in EUR m) FY-22 FY-23 16% Net interest income 83.4 95.9 Net fee and commission income 6.7 7.0 Ukraine 46% Other operating income (net) 9.6 8.9 Operating income 99.7 111.7 Georgia Personnel expenses 16.7 18.8 38% Adm
Slide 42: Segment South America
Segment South America Regional loan portfolio breakdown Key financial data (in EUR m) FY-22 FY-23 Net interest income 25.5 19.2 Net fee and commission income 0.2 0.2 Other operating income (net) -1.6 0.7 Ecuador 100% Operating income 24.1 20.1 Personnel expenses 7.4 8.1 Admininistrative expenses 12.
Slide 43: Key figures per ProCredit bank (as per FY 2023)
Key figures per ProCredit bank (as per FY 2023) North Bosnia & Country Bulgaria Serbia Kosovo Romania Macedonia Herzegovina Customer loan portfolio (EUR m) 1,517 908 748 508 383 298 Change in customer loan portfolio (%) 6.0% -2.2% 10.9% 7.1% 9.1% 4.5% Credit impaired loans (Stage 3) 0.8% 3.6% 1.3% 2
Slide 44: Appendix E. Capital, liquidity and other information
Appendix A. Impact reporting B. P&L and balance sheet C. Loan portfolio D. Information on segment and bank level E. Capital, liquidity and other information ProCredit Group | Q4 / FY 2023 results | Frankfurt am Main, 20 March 2024 43
Slide 45: Funding, rating and liquidity
Funding, rating and liquidity Funding sources Deposit-to-loan ratio development Rating 2% 1% 1% 103% 13% Customer deposits 117% BBB (stable) ProCredit Holding rating Liabilities to banks by Fitch, last affirmed on Debt securities 23 June 2023 Subordinated debt 83% Other liabilities Dec-22 Dec-23 Tot
Slide 46: 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 and The credit-impaired coverage ratio(8) gives insights into loss allowances for manage the implementation and further development of the group’s business credit-impaired l
Slide 47: Contact Investor Relations
Contact Investor Relations Financial calendar (continuously updated on IR Website) Date Location Event information 21.03.2024 Capital Markets Day 2024 13.05.2024 Quarterly Financial Report as of 31 March 2024 14.05. – 15.05.2024 Frankfurt/ Main Spring Conference 2024 04.06.2024 Frankfurt/ Main Annua
Slide 48: 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, Frankfurt am Main, Federal Republic of looking statements including statements regarding our intent, belie