Procredit Holding Ag · XETR:PCZ
Procredit — Q2 2021 Earnings Presentation
40 slides from Procredit's earnings presentation, Aug 12, 2021
Slide 1: Q2 2021 results
Dr Gabriel Schor, Member of the Management Board Christian Dagrosa, Manager Q2 2021 results Frankfurt am Main, August 2021
Slide 2: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q2 2021 results | Frankfurt am Main, 12 August 2021 1
Slide 3: Highlights H1 2021
Highlights H1 2021 Continued strong business development in Q2-21 ► Customer loans grew by 4.5% (YTD 7.7%), underpinning good positioning ► Green loan portfolio amounting to EUR 1.1bn, representing now 19.1% of total loan portfolio ► Customer deposits steady (YTD 2.5%), with strong increase in priva
Slide 4: Key recent developments and outlook for our countries of operations
Key recent developments and outlook for our countries of operations Overview of regional presence in SEE/EE COVID-19 pandemic and governmental response ► Most restrictive measures such as curfews and lockdowns lifted in most countries based on recent development of infections rates ► Shops, business
Slide 5: Steady development in customer loans
Steady development in customer loans Loan portfolio growth in H1-21 ► Strong growth in customer loans in H1-21 (EUR 402m/7.7%) and Q2-21 (EUR 244m/4.5%) ▪ Continued lending to business clients during pandemic fortifying strong positioning as SME bank, as banking sector growth largely driven by priva
Slide 6: Good deposit development through digital banking channels
Good deposit development through digital banking channels ► YOY increase of EUR 575m (+13%) Deposits by product ▪ Achieved mostly through growth in business clients, also 5,021 private client deposits increasing visibly (+ EUR 198m) 4,447 3,859 1,554 ▪ Increased share of sight deposits and FlexSave
Slide 7: H1 2021 results versus increased guidance
H1 2021 results versus increased guidance Guidance Actual FY 2021 H1 2021 ► Growth of the loan portfolio c. 10% 7.7% 8.0 – 9.5% ► Return on equity (RoE) 9.1% (original: 6.0 – 7.5%) c. 65% ► Cost-income ratio (CIR) 64.4% (original: 65 – 68%) > 13% and c. 9% ► CET1 ratio and leverage ratio 13.7% and 9
Slide 8: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q2 2021 results | Frankfurt am Main, 12 August 2021 7
Slide 9: H1 2021 results at a glance
H1 2021 results at a glance In EUR m Q2-2020 Q2-2021 H1-2020 H1-2021 y-o-y Net interest income 49.0 53.9 99.9 103.2 3.3 Net fee and commission income 10.6 12.1 22.6 24.1 1.5 Other operating income (net) 0.3 0.5 2.1 2.0 -0.1 Operating income 59.9 66.5 124.6 129.3 4.7 Income Personnel expenses 20.7 21
Slide 10: Net interest income
Net interest income ► Q2-21 net interest income significantly increased against prior quarters; EUR 4.6m or 9.3% against Q1-21 2.9% 2.9% 2.9% 2.8% 2.7% 53.9 ▪ Positive volume effects through steady portfolio growth 50.8 50.8 49.0 49.3 ▪ NIM up by 20 bps qoq supported by all banks and positive base r
Slide 11: Provisioning expenses
Provisioning expenses ► Q2-21 loan loss provisioning expenses at EUR -0.9m, corresponding to -6bps cost of risk ▪ Provisions from loan portfolio growth more than offset by 71 bps release from reduction of credit impaired portfolio (EUR 5.0m / 3.5%) and recoveries from written-off loans 57 bps ▪ Reco
Slide 12: Net fee and commission income
Net fee and commission income ► H1-21 net fee and commission income EUR 1.5m or 6.5% above previous year 12.1 12.7 12.0 10.6 12.1 • Increased fee income of EUR 2.8m driven by c. 20% growth in money transfer and credit/debit card fees, underlining strong recovery of transactions since COVID year 2020
Slide 13: Operating expenses
Operating expenses ► Q2-21 cost-income ratio further improved to 64.0% 68.5% 72.4% 66.7% 64.8% 64.0% ▪ Significant increase in pre-provision income by EUR 3.7m or 5.8% overcompensating slight increase in cost base 22.4 ▪ Increased general and administrative expenses (EUR 1.7m) and broadly 20.7 21.1
Slide 14: 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 management, training and development Includes ProCredit Holding, Quipu, ProCredit Academy Fürth, ProCredit Bank Germany (EUR 58m customer loan portfolio; EUR 273m customer
Slide 15: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q2 2021 results | Frankfurt am Main, 12 August 2021 14
Slide 16: Structure of the loan portfolio
Structure of the loan portfolio Loan portfolio by geographical segments Loan portfolio by sector Investment and Ecuador Germany other loans 1% Housing 2% Moldova 6% 6% Bulgaria Wholesale and 3% 21% retail trade Georgia 7% 26% Other economic activities 20% Ukraine 12% Serbia Transportation Bosnia 18%
Slide 17: Loan portfolio quality
Loan portfolio quality IFRS 9 ► Continued positive development of risk indicators in Q2-21 ► Stage 3 loans at 2.5%, slightly below level of Q4-20, driving Net 0.3% 0.1% 0.1% write-offs good development of cost of risk Coverage ► Stage 2 loans at 4.4% well below level of Q4-20 impaired 89.1% 91.4% 90
Slide 18: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q2 2021 results | Frankfurt am Main, 12 August 2021 17
Slide 19: Asset reconciliation
Asset reconciliation ProCredit Group | Q2 2021 results | Frankfurt am Main, 12 August 2021 18
Slide 20: Liabilities and equity reconciliation
Liabilities and equity reconciliation Debt securities ProCredit Group | Q2 2021 results | Frankfurt am Main, 12 August 2021 19
Slide 21: Regulatory capital and risk-weighted assets
Regulatory capital and risk-weighted assets in EUR m Dec-20 Jun-21 ► Capital ratios well above regulatory capital requirements CET1 capital 706 737 (8.2% CET1 capital, 10.1% T1, 12.6% total capital) Additional Tier 1 capital 0 0 ► CET1 capital includes full-year profits of FY 2020 Tier 1 capital 706
Slide 22: Development of CET1 capital ratio (fully loaded)
Development of CET1 capital ratio (fully loaded) Positive development in group’s H2-20 attributable profits 2nd phase introduction of new translation reserve due to (EUR 13.9m) net of dividend Loan portfolio growth of CRR 2 SME factor and currency appreciation (mainly accrual of 1/3 included as of E
Slide 23: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q2 2021 results | Frankfurt am Main, 12 August 2021 22
Slide 24: Q&A
Q&A ProCreditGroup ProCredit Bank| Bulgaria Q2 2021 results | Frankfurt am Main, 12 August 2021 23
Slide 25: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q2 2021 results | Frankfurt am Main, 12 August 2021 24
Slide 26: ProCredit – A unique approach to banking
ProCredit – A unique approach to banking Summary Key figures H1 2021 and FY 2020 ► A profitable, development-oriented commercial group of banks for SMEs Total assets Customer loan portfolio Deposit/loan with a focus on South Eastern Europe and Eastern Europe EUR 7,608m EUR 5,656m 89% ► Headquartered
Slide 27: Overview of quarterly financial development
Overview of quarterly financial development In EUR m Q2-2020 Q3-2020 Q4-2020 Q1-2021 Q2-2021 Net interest income 49.0 50.8 50.8 49.3 53.9 Net fee and commission income 10.6 12.1 12.7 12.0 12.1 Other operating income (net) 0.3 0.6 0.7 1.6 0.5 Operating income 59.9 63.5 64.2 62.8 66.5 Personnel expens
Slide 28: Segment South Eastern Europe
Segment South Eastern Europe Regional loan portfolio breakdown Key financial data Bosnia (in EUR m) H1 2020 H2 2021 Albania 6% 6% Net interest income 56.0 61.9 Bulgaria Romania 29% Net fee and commission income 15.7 15.3 9% Other operating income (net) -0.7 -0.5 Operating income 71.0 76.7 North Mace
Slide 29: Segment Eastern Europe
Segment Eastern Europe Regional loan portfolio breakdown Key financial data Moldova (in EUR m) H1 2020 H2 2021 13% Net interest income 32.4 32.0 Net fee and commission income 4.2 3.4 Other operating income (net) 3.2 2.4 Operating income 39.8 37.8 Georgia Ukraine Personnel expenses 6.3 6.1 31% 56% Ad
Slide 30: Segment South America
Segment South America Regional loan portfolio breakdown Key financial data (in EUR m) H1 2020 H2 2021 Net interest income 9.3 9.0 Net fee and commission income -0.2 -0.2 Other operating income (net) -0.2 -0.6 Ecuador 100% Operating income 9.0 8.2 Personnel expenses 2.9 2.7 Administrative expenses 5.
Slide 31: Development of green loan portfolio
Development of green loan portfolio Green loan portfolio growth 12.6% 15.4% 16.6% 18.7% 19.1% ► Green loan portfolio amounting to EUR 1.1bn, representing 1,078 19.1% of total loan portfolio 985 26 21 795 ▪ H1-21 growth of EUR 94m/9.5% 678 17 15 ► Includes financing of investments in: 489 14 964 1,05
Slide 32: 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% 37% 53% 15% 10% 26% < 50k 50-250k 250-500k 500k-1.5m >1.5m EUR USD Other currencies ProCredit Group | Q2 2021 results | Frankfurt am Main, 12 August 2021 31
Slide 33: Structure of collateral
Structure of collateral Collateral by type ► Majority of collateral consists of mortgages 19% ► Growing share of financial guarantees mainly as a result of InnovFin and other guarantee programmes provided by the European Investment Fund ► Clear, strict requirements regarding types of acceptable coll
Slide 34: Funding and rating
Funding and rating Funding sources overview ► Highly diversified funding structure and counterparties 5% 1% 1% 10% ► Customer deposits main funding source, accounting for 74%, supplemented by long-term funding from IFIs and institutional investors Customer deposits 9% Liabilities to IFIs Liabilities
Slide 35: Liquidity update
Liquidity update Liquidity coverage ratio 151% 142% 151% ► LCR at 151%, comfortably above regulatory minimum 100% 100% 100% ► Stable level of HLA despite strong loan portfolio growth and measures to reduce excess liquidity Jun-19 Jun-20 Jun-21 LCR Regulatory minimum Highly liquid assets (HLA) and HL
Slide 36: Balance sheet
Balance sheet in EUR m Dec-20 Jun-21 Assets Cash and central bank balances 1,405 1,294 Loans and advances to banks 237 236 Investment securities 336 333 Loans and advances to customers 5,254 5,656 Loss allowance for loans to customers -123 -128 Derivative financial assets 1 3 Property, plant and equ
Slide 37: Income statement by segment
Income statement by segment 01.01.- 30.06.2021 South Eastern Germany Eastern Europe South America Consolidation Group (in EUR m) Europe Interest and similar income 12 52 77 16 -10 147 of which inter-segment 10 0 0 0 0 0 Interest and similar expenses 12 20 15 7 -10 43 of which inter-segment 1 3 4 3 0
Slide 38: 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 group also considers the following additional indicators: and manage the implementation and further development of the group’s business and risk strategy: ▪ The ratio of c
Slide 39: Contact Investor Relations
Contact Investor Relations Financial calendar (continuously updated on IR Website) Date Place Event information 06.-07.09.2021 virtual Equity Forum, Fall Conference 2021 12.10.2021 virtual Capital Markets Day 11.11.2021 Quarterly Financial Report as of 30 September 2021 22.-24.11.2021 virtual Deutsc
Slide 40: 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