Procredit Holding Ag · XETR:PCZ
Procredit — Q3 2021 Earnings Presentation
41 slides from Procredit's earnings presentation, Nov 11, 2021
Slide 1: Q3 2021 results
Dr Gabriel Schor, Member of the Management Board Christian Dagrosa, Manager Q3 2021 results Frankfurt am Main, November 2021
Slide 2: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q3 2021 results | Frankfurt am Main, 11 November 2021 1
Slide 3: Highlights Q3 2021
Highlights Q3 2021 Q3-21 and 9M-21 financial result significantly improved ► Net profit YTD of EUR 62.0m (+86% vs. 9M-20 of EUR 33.4m), corresponding to an annualised RoE of 10.1% (9M-20: 5.6%) ▪ Q3-21 RoE at 12.3%, with strong cost-income ratio of 59.0% due to increase in net interest income and fe
Slide 4: Continued strong growth in customer loans
Continued strong growth in customer loans Loan portfolio growth YTD ► Strong growth in customer loans YTD (EUR 549m/10.4%) and in 10.4% Q3-21 (EUR 147m/2.6%) ▪ Growth in all loan categories, with stronger demand for working capital loans in 9M-21 with maturities < 3 years ▪ All ProCredit banks contr
Slide 5: 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 ► Steady progress of vaccination roll-out (share of people with at least one vaccine dose on average at 30%) helps curb the impact on the population
Slide 6: 9M 2021 results versus increased guidance
9M 2021 results versus increased guidance Guidance Actual FY 2021 9M 2021 ► Growth of the loan portfolio c. 10% 10.4% ► Return on equity (RoE) 8.0 – 9.5% 10.1% upper-end corridor result likely ► Cost-income ratio (CIR) c. 65% 62.4% likely to not exceed 65% ► CET1 ratio and leverage ratio > 13% and c
Slide 7: 9M 2021 results underline potential for higher levels of profitability going forward
9M 2021 results underline potential for higher levels of profitability going forward Recap of ProCredit Capital Markets Day 2021 (12 October 2021): FY 2021 FY 2022 / 23 FY 2024 and later Strong progress towards guidance: Consolidation of profitability level: Upside potential: ► Medium-term guidance
Slide 8: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q3 2021 results | Frankfurt am Main, 11 November 2021 7
Slide 9: Q3 2021 results at a glance
Q3 2021 results at a glance In EUR m Q3-2020 Q3-2021 9M-2020 9M-2021 y-o-y Net interest income 50.8 58.2 150.7 161.4 10.7 Net fee and commission income 12.1 13.0 34.7 37.1 2.4 Other operating income (net) 0.6 4.0 2.6 6.1 3.4 Operating income 63.5 75.2 188.1 204.5 16.5 Income Personnel expenses 20.7
Slide 10: Net interest income
Net interest income ► Strong Q3-21 NII of EUR 58.2m (increased by EUR 4.3m or 8.0% vs. Q2-21 and EUR 8.9m or 18.0% vs. Q1-21) 3.0% 2.9% 2.8% 2.9% ► Net interest income with positive dynamic in 2021 as result of 2.7% 58.2 53.9 ▪ Volume effects driven by strong portfolio growth (10.4% YTD) 50.8 50.8 4
Slide 11: Provisioning expenses
Provisioning expenses ► Q3-21 loan loss provisioning expenses at EUR 0.5m, corresponding to 4bps cost of risk 57 bps ▪ New provisioning mainly as result of loan portfolio growth ▪ Recoveries from written-off loans at good level of EUR 2.6m 42 bps 7.5 ► 9M-21 loan loss provisioning expenses of EUR 3.
Slide 12: Net fee and commission income
Net fee and commission income ► Q3-21 net fee and commission income EUR 0.9m or 7.1% above previous quarter 12.7 13.0 12.1 12.0 12.1 • Increased fee and commission income of EUR 1.5m driven primarily by continued increase in transactions, yielding higher income from money transfer and credit/debit c
Slide 13: Operating expenses
Operating expenses ► Q3-21 cost-income ratio further reduced to low level of 59.0% ▪ Significant increase in pre-provision income by EUR 8.6m or 72.4% 13.1% vs. Q2-21 overcompensating slight increase in costs 66.7% 64.8% 64.0% 59.0% ▪ Increased general and administrative expenses and higher 22.4 per
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 54m customer loan portfolio; EUR 240m customer
Slide 15: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q3 2021 results | Frankfurt am Main, 11 November 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 Germany other loans Ecuador Housing 1% 2% 7% 6% Moldova Bulgaria Wholesale and 3% 21% retail trade Georgia 26% 6% Other economic activities 20% Ukraine 13% Serbia Transportation 17% and st
Slide 17: Loan portfolio quality
Loan portfolio quality IFRS 9 ► Continued positive development of risk indicators in Q3-21 Net 0.3% 0.1% 0.1% ► Share of Stage 3 loans at 2.6% stable against Q4-20, driving write-offs good development of cost of risk Coverage impaired 89.1% 91.4% 87.3% ► Share of Stage 2 loans at 4.1% well below lev
Slide 18: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q3 2021 results | Frankfurt am Main, 11 November 2021 17
Slide 19: Asset reconciliation
Asset reconciliation ProCredit Group | Q3 2021 results | Frankfurt am Main, 11 November 2021 18
Slide 20: Liabilities and equity reconciliation
Liabilities and equity reconciliation Debt securities ProCredit Group | Q3 2021 results | Frankfurt am Main, 11 November 2021 19
Slide 21: Regulatory capital and risk-weighted assets
Regulatory capital and risk-weighted assets in EUR m Dec-20 Sep-21 ► Capital ratios well above regulatory capital requirements CET1 capital 706 772 (8.2% CET1 capital, 10.1% T1, 12.6% total capital) Additional Tier 1 capital 0 0 Tier 1 capital 706 772 ► CET1 capital includes full-year profits of FY
Slide 22: Development of CET1 capital ratio (fully loaded)
Development of CET1 capital ratio (fully loaded) Positive development in group’s 2nd phase introduction of new translation reserve due to H2-20 and H1-21 attributable Loan portfolio growth of EUR CRR 2 SME factor and currency appreciation (mainly profits net of 1/3 dividend 549m (10.4%) application
Slide 23: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q3 2021 results | Frankfurt am Main, 11 November 2021 22
Slide 24: Q&A
Q&A Photovoltaic project financed by ProCredit Bulgaria 23
Slide 25: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q3 2021 results | Frankfurt am Main, 11 November 2021 24
Slide 26: ProCredit – A unique approach to banking
ProCredit – A unique approach to banking Summary Key figures 9M 2021 and FY 2020 ► A profitable, development-oriented commercial group of banks Total assets Customer loan portfolio Deposit/loan with a focus on South Eastern Europe and Eastern Europe EUR 7,885m EUR 5,803m 91% ► Headquartered in Frank
Slide 27: Good deposit development through digital banking channels
Good deposit development through digital banking channels ► YOY increase of EUR 554m (+12%) Deposits by product ▪ Achieved mostly through growth in business clients, also private client deposits increasing visibly (+ EUR 254m) 5,272 4,718 ▪ Increased share of sight deposits and FlexSave 4,143 1,562
Slide 28: Overview of quarterly financial development
Overview of quarterly financial development In EUR m Q3-2020 Q4-2020 Q1-2021 Q2-2021 Q3-2021 Net interest income 50.8 50.8 49.3 53.9 58.2 Net fee and commission income 12.1 12.7 12.0 12.1 13.0 Other operating income (net) 0.6 0.7 1.6 0.5 4.0 Operating income 63.5 64.2 62.8 66.5 75.2 Income Personnel
Slide 29: Segment South Eastern Europe
Segment South Eastern Europe Regional loan portfolio breakdown Key financial data (in EUR m) 9M 2020 9M 2021 Albania Bosnia 6% 6% Net interest income 86.2 95.2 Bulgaria Romania 29% Net fee and commission income 24.0 23.3 9% Other operating income (net) -0.1 1.8 Operating income 110.1 120.3 North Mac
Slide 30: Segment Eastern Europe
Segment Eastern Europe Regional loan portfolio breakdown Key financial data Moldova (in EUR m) 9M 2020 9M 2021 13% Net interest income 47.8 51.0 Net fee and commission income 6.4 5.5 Other operating income (net) 4.3 3.8 Operating income 58.5 60.3 Georgia Ukraine 30% Personnel expenses 9.3 9.5 57% Ad
Slide 31: Segment South America
Segment South America Regional loan portfolio breakdown Key financial data (in EUR m) 9M 2020 9M 2021 Net interest income 13.8 14.2 Net fee and commission income -0.3 -0.3 Other operating income (net) -0.5 -0.9 Ecuador 100% Operating income 13.1 12.9 Personnel expenses 4.3 4.2 Admininistrative expen
Slide 32: Development of green loan portfolio
Development of green loan portfolio Green loan portfolio growth ► Green loan portfolio amounting to EUR 1.1bn, representing 12.6% 15.4% 16.6% 18.7% 19.0% 1,100 19.0% of total loan portfolio 985 30 21 ▪ YTD growth of EUR 115m/11.7% 795 678 17 15 ► Includes financing of investments in: 489 1,070 14 96
Slide 33: 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% 34% 19% 37% 52% 14% 11% 26% < 50k 50-250k 250-500k 500k-1.5m >1.5m EUR USD Other currencies ProCredit Group | Q3 2021 results | Frankfurt am Main, 11 November 2021 32
Slide 34: 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 35: Funding and rating
Funding and rating Funding sources overview ► Highly diversified funding structure and counterparties 1% 5% 1% ► Customer deposits main funding source, accounting for 75%, 13% supplemented by long-term funding from IFIs and institutional Customer deposits investors Liabilities to IFIs 5% Liabilities
Slide 36: Liquidity update
Liquidity update Liquidity coverage ratio 175% ► LCR of 154% and NSFR of 141% (Aug-21) remain comfortably 149% 154% above the respective regulatory minimum 100% 100% 100% ► Stable level of HLAs, with increase in Q3-21 primarily driven by strong deposit portfolio growth, partially being seasonal Sep-
Slide 37: Balance sheet
Balance sheet in EUR m Dec-20 Sep-21 Assets Cash and central bank balances 1,405 1,392 Loans and advances to banks 237 247 Investment securities 336 361 Loans and advances to customers 5,254 5,803 Loss allowance for loans to customers -123 -130 Derivative financial assets 1 3 Property, plant and equ
Slide 38: Income statement by segment
Income statement by segment 01.01.- 30.09.2021 South Eastern Germany Eastern Europe South America Consolidation Group (in EUR m) Europe Interest and similar income 18 81 117 25 -16 227 of which inter-segment 15 0 0 0 0 0 Interest and similar expenses 17 30 22 11 -16 65 of which inter-segment 1 4 6 4
Slide 39: 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 40: Contact Investor Relations
Contact Investor Relations Financial calendar (continuously updated on IR Website) Date Place Event information 22.-24.11.2021 virtual Deutsche Börse, Deutsches Eigenkapitalforum 2021 08.12.2021 virtual Extraordinary General Meeting Investor Relations Media Relations ProCredit Holding AG & Co. KGaA
Slide 41: 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