Slide 1: FY 2016 results
FY 2016 results Frankfurt am Main, 29th March 2017 (updated as of 03.05.2017) Borislav Kostadinov, Member of the Management Board Jana Donath, Manager Finance and Controlling
Slide 2: ProCredit – A unique approach to banking
ProCredit – A unique approach to banking Summary Key figures FY 2016 ► A profitable, development-oriented commercial banking group for SMEs with focus on South Eastern Europe and Eastern Europe Total assets Gross loan portfolio(1) Deposits/loans(2) EUR 5,668m EUR 3,629m 96% ► Internationally establi
Slide 3: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | FY 2016 results | Frankfurt am Main, 29th March 2017 3
Slide 4: Where do we come from? Significant progress since 2013
Where do we come from? Significant progress since 2013 Focused growth in SME loan categories Decrease in number of cash desk transactions 81% 28% 58% 5% Dec-13 Dec-16 Dec-13 Dec-16 (1) Loan portfolio > EUR 30k in % total loan portfolio Cash desk transactions in % total transactions Regional fo
Slide 5: Recent key achievements
Recent key achievements Execution of business strategy ► Strong growth with target SME clients (+13%) ► Implementation of modern 24/7 zones at majority of outlets ► Successful capital increase of EUR 31.9m to support attractive growth opportunities Execution of regional strategy ► Opening of branch
Slide 6: Strong loan volume growth in target loan categories
Strong loan volume growth in target loan categories Note: Loan volume growth split by initial loan size in all segments ProCredit Group | FY 2016 results | Frankfurt am Main, 29th March 2017 6
Slide 7: Reconciliation of FY 2016 net profit
Reconciliation of FY 2016 net profit Decreased net interest income due to run-off of loan portfolio Strong decrease of cost EUR 14m profits from discontinued < EUR 30k and decreased NIM largely compensated by base driven by both operations in 2016 compared to significantly reduced cost of risk: 0.5%
Slide 8: Segmental contribution to group net income
Segmental contribution to group net income Group functions such as e.g. risk, reporting, capital and liquidity Profit after tax of EUR 14.0m, split into profit management, training development contributions from entities in El Salvador, Nicaragua, Bolivia and Mexico of Includes ProCredit Holding, Qu
Slide 9: Outlook for ProCredit Group 2017
Outlook for ProCredit Group 2017 ► Growth of the gross loan portfolio in the target loan categories (>EUR 30,000) c. 10% ► Growth of the total gross loan portfolio 5 – 8% ► Return on average equity (RoAE) 7 – 9% ► CET1 ratio (fully loaded) > 13% ► Dividend payout ratio 1/3 of profits In the mid-term
Slide 10: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | FY 2016 results | Frankfurt am Main, 29th March 2017 10
Slide 11: FY 2016 results at a glance
FY 2016 results at a glance (in EUR m) FY 2015 FY 2016 y-o-y Net interest income 260.7 230.8 -11% Provision expenses 42.1 18.6 -56% Net fee and commission income 47.7 43.0 -10% Net result of other operating income -1.4 4.2 n.m. Operating income 265.0 259.3 -2% Income Operating expenses 211.4 198.2 -
Slide 12: Net interest income
Net interest income ► Decreased net interest income yoy impacted mainly by the strategic decline of the loan portfolio with loan sizes 66.6 < EUR 30k (-28% yoy) 60.7 5.5% 58.2 56.7 ► Decline in interest income partly compensated by 55.3 decrease in interest expenses; mainly from increased 5.0% 4.8%
Slide 13: Provisioning expenses
Provisioning expenses ► Further declined allowances for losses on loans and advances to customers 148 bps 13.0 ► Down to EUR 18.6m in FY 2016 from EUR 42.1m in FY 2015 ► Loan loss provisions ratio further down to 0.5% in FY 107 bps 2016 from 1.1% in FY 2015, partly driven by strategic 9.4 portfolio
Slide 14: Net fee and commission income
Net fee and commission income ► Stable during FY 2016, however, below the levels in FY 2015 13.8 ► Down to EUR 43.0m in FY 2016 compared to EUR47.7m in FY 2015, mainly as a result of a decrease in income from cash transactions 10.7 10.9 10.9 10.4 ► Significant increase of net fee and commission inco
Slide 15: Operating expenses
Operating expenses ► Decrease in operating expenses by 6.3% during FY 2016 78.1% 71.7% 69.7% (EUR 198m in FY 2016 compared to EUR 211m in 68.6% 68.9% FY 2015) 53.8 53.6 23.0 47.3 49.2 48.0 22.1 ► Decline in cost base influenced by 22.1 22.1 21.8 ► Decreased number of staff (down by 12.5% to 4,078 as
Slide 16: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | FY 2016 results | Frankfurt am Main, 29th March 2017 16
Slide 17: Structure of the loan portfolio
Structure of the loan portfolio Loan portfolio by geographical segments Loan portfolio by sector Notes: Loan portfolio by geographical segments and by sector in % of total gross loan portfolio (EUR 3,629m as per 31-Dec-16) ProCredit Group | FY 2016 results | Frankfurt am Main, 29th March 2017 17
Slide 18: Structure of the loan portfolio (continued)
Structure of the loan portfolio (continued) Loan portfolio by initial loan size Loan portfolio by currency Notes: Loan portfolio by initial loan size in % of total outstanding principal (EUR 3,604m as per 31-Dec-16); loan portfolio by currency in % of total gross loan portfolio (EUR 3,629m as per 31
Slide 19: Loan portfolio quality
Loan portfolio quality Net write-offs(1) 0.8% 0.7% ► Net write-offs at continuously low level Coverage ratio 58% 66% impaired(2) ► Low portfolio at risk, lower compared to Dec-15 mainly due to the changed structure Coverage ratio 97% 106% PAR30(3) of the loan portfolio Impaired 7.4% ► Prudent risk m
Slide 20: Structure of collateral
Structure of collateral Collateral by type (Dec-16) ► Total collateral of EUR 2.8bn; of which majority as mortgages (73% as per Dec-16) 24.1% ► Clear and strict requirements regarding types of acceptable collateral, legal aspects of collateral and insurance of collateral items ► Standardised collate
Slide 21: Development of green loan portfolio
Development of green loan portfolio Overview of growth in last three years ► Strong growth of the green loan portfolio (38% p.a. over the 3.0% 4.0% 6.4% 9.1% last three years) ► Includes credit products for investments in 329 264 22 ► Energy efficiency 21 174 126 23 307 ► Renewable energies 22 242 1
Slide 22: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | FY 2016 results | Frankfurt am Main, 29th March 2017 22
Slide 23: Asset reconciliation
Asset reconciliation Classification of entity in Bolivia as Sale of entity in Mexico; discontinued operation in Q3-16; remaining entities held for subsequent sale of entity sale: ProCredit banks in in Q4-16 (associated decline of group El Salvador and Nicaragua net loan portfolio of EUR 568m) Other
Slide 24: Liabilities and equity reconciliation
Liabilities and equity reconciliation Increase in current accounts (+EUR 263m) and EUR 31.9m capital increase in Nov-16, savings accounts (+EUR 110m), offset by EUR 41.1m retained earnings, decrease in term deposit accounts (-EUR 691m) -EUR18.4m increase of translation reserve Liabilities to 6% bank
Slide 25: Liquidity update
Liquidity update Liquidity coverage ratio ► Comfortable liquidity situation ► LCR at Group level at 194% as of 194% 174% 31-Dec-16, significantly above regulatory requirement 60% 70% ► Highly liquid assets of EUR 1.1bn; decrease yoy due to overall decrease in balance sheet Dec-15 Dec-16 LCR ratio Re
Slide 26: Regulatory capital and RWA
Regulatory capital and RWA Overview of capitalisation Development of RWA by category (in EUR m) Dec-15 Dec-16 Total RWA in EUR m CET1 capital (net of deductions) 535 574 5,258 (12.5)% Additional Tier 1 capital (net of deductions) 0 0 15% 4,603 Tier 1 capital 535 574 10% 15% 10% Tier 2 capital 103 15
Slide 27: Development of CET1 capital ratio (fully loaded)
Development of CET1 capital ratio (fully loaded) Development of CET 1 ratio (fully loaded) in 2016 +1.3%pp related to sale of Banco Pyme Recognition of profits EUR 31.9m capital increase Leverage ratio Los Andes ProCredit Bolivia, remainder Q4-15, Q1-16, Q2-16, in Nov-16 by existing (fully loaded) r
Slide 28: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | FY 2016 results | Frankfurt am Main, 29th March 2017 28
Slide 29: Q&A
Q&A ProCredit Group | FY 2016 results | Frankfurt am Main, 29th March 2017 29
Slide 30: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | FY 2016 results | Frankfurt am Main, 29th March 2017 30
Slide 31: Overview of quarterly financial development
Overview of quarterly financial development (in EUR m) Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Net interest income 66.6 60.7 58.2 56.7 55.3 Provision expenses 13.0 9.4 4.5 2.9 1.8 Net fee and commission income 13.8 10.7 10.9 10.4 10.9 Net result of other operating income -5.7 -0.8 -0.1 2.4 2.6 Operating incom
Slide 32: Strong loan volume growth in target loan categories
Strong loan volume growth in target loan categories South Eastern Europe and Eastern Europe FY 2016 -27% (EUR 214m) +14% (EUR 321m) +3% (in EUR m) Initial loan size (in EUR k) Remaining stock EUR 173 m EUR 395 m FY 2015 -19% (EUR 181m) +18% (EUR 348m) +6% (in EUR m) Initial loan size (in EUR k) Note
Slide 33: Segment South Eastern Europe
Segment South Eastern Europe Regional loan portfolio split Key financial data Bosnia Albania 6% (in EUR m) FY 2015 FY 2016 6% Bulgaria 25% Net interest income 174.6 150.5 Romania 9% Provision expenses 19.1 8.0 Net fee and commission income 33.8 28.7 Net result of other operating income -6.1 1.5 Mace
Slide 34: Segment Eastern Europe
Segment Eastern Europe Regional loan portfolio split Key financial data Moldova (in EUR m) FY 2015 FY 2016 14% Net interest income 59.6 59.7 Provision expenses 18.7 12.7 Georgia Net fee and commission income 9.4 8.8 44% Net result of other operating income 7.1 4.4 Operating income 57.4 60.1 Operatin
Slide 35: Segment South America
Segment South America Regional loan portfolio split Key financial data Mexico Colombia (in EUR m) FY 2015 FY 2016 3% 11% Net interest income 32.4 23.8 Provision expenses 4.1 -2.0 Net fee and commission income 0.5 -0.2 Net result of other operating income 3.9 2.0 Operating income 32.8 27.7 Operating
Slide 36: Funding and rating update
Funding and rating update Funding sources overview ► Highly diversified funding structure and counterparties 3.7% 0.8% 3.1% 6.8% ► Customer deposits main funding source, Customer deposits accounting for 75% as of 31-Dec-16 10.7% Liabilities to IFIs ► Supplemented by long term funding from Liabilitie
Slide 37: Sustainability update
Sustainability update Continued focus on transparent reporting ► Advanced disclosure including e.g. ► Annual Environmental Performance Report 2016 (to be published May-17) ► Group Environmental Management Policy ► Further documents on the group’s approach to managing environmental and social risks i
Slide 38: Balance sheet
Balance sheet (in EUR m) Dec-15 Dec-16 Assets Cash and cash equivalents 834 937 Loans and advances to banks 339 287 Financial assets at fair value through profit and loss 1 0 Available-for-sale financial assets 207 250 Loans and advances to customers 4,105 3,629 Allowance for losses on loans and adv
Slide 39: Income statement – quarterly overview
Income statement – quarterly overview (in EUR m) Q1 2016 Q2 2016 Q3 2016 Q4 2016 FY 2016 Interest and similar income 85.1 82.8 81.1 78.6 327.6 Interest and similar expenses 24.4 24.6 24.4 23.3 96.8 Net interest income 60.7 58.2 56.7 55.3 230.8 Allowance for losses on loans and advances to customers
Slide 40: Income statement by segment
Income statement by segment South Eastern FY 2016 (in EUR m) Germany Eastern Europe South America Consolidation Group Europe Interest and similar income 20.5 108.0 177.5 39.1 (17.5) 327.6 of which inter-segment 17.3 0.1 0.0 0.0 Interest and similar expenses 21.9 48.2 27.0 15.3 (15.6) 96.8 of which i
Slide 41: “Hausbank” for SMEs serving their typical banking needs
“Hausbank” for SMEs serving their typical banking needs Ukraine Comprehensive service as “Hausbank” Products Customers Value-added Simple loan and deposit products Target customers with high potential: SMEs Significant benefits for clients… ► Full range of business loans ► SMEs with formalised struc
Slide 42: Continuous training in centralised academy is the cornerstone of corporate culture
Continuous training in centralised academy is the cornerstone of ProCredit‘s corporate culture ► Mandatory for all new recruits ► Six-month programme before final hiring ► Dual education through hands-on job training and courses ProCredit Entry ► 2/3 of participants usually receive a final employmen
Slide 43: Comprehensive “Hausbank” service benefitting SME clients (I/II)
Comprehensive “Hausbank” service benefitting ProCredit’s SME clients (I/II) Al Sistem doo and ProCredit Bank Serbia ► Al Sistem has been a client of ProCredit Bank since 2007 ► The company produces and installs aluminium and PVC constructions in residential, business and industrial buildings ► The c
Slide 44: Comprehensive “Hausbank” service benefitting SME clients (II/II)
Comprehensive “Hausbank” service benefitting ProCredit’s SME clients (II/II) Aliana OOD and ProCredit Bank Bulgaria ► Aliana OOD is a leading textile manufacturer led by Vassil and Rositsa Zahariev ► Founded in 1993, the company today is a top producer of silicone polyester wadding and silicone down
Slide 45: Long-standing and well interconnected management teams
Long-standing and well interconnected management teams at group and local level Experienced management collaborating at Holding and local level ProCredit Holding as of 1 April 2017 Borislav Kostadinov Dr. Anja Lepp Sandrine Massiani Dr. Gabriel Schor 15 31(1) 9 33(1) ► Credit risk management ► Risk
Slide 46: High loan quality based on trustful long-term relationships and prudent risk management
High loan quality based on trustful long-term relationships and prudent risk management Business client advisers (BCAs) with key focus Selected SME clients on clients and risk ► Bedegi, founded in 1999, chose the ProCredit Bank ► Comprehensive internal BCA training fosters high staff qualification i
Slide 47: The development-oriented approach as the foundation of ProCredit's strong reputation
The development-oriented approach as the foundation of ProCredit‘s strong reputation ProCredit has an ethical corporate mission… …and reflected in how ProCredit does business ► Development also means Fostering entrepreneurs and SMEs − Fostering democracy and free speech ► Focus on SMEs as drivers of
Slide 48: The corporate culture is the base of a unique approach to employee selection
The corporate culture is the base of a unique approach to employee selection ProCredit’s corporate mission is the …with a multistage and highly selective foundation of its business ethics… approach to hiring employees… ► “Bankers who don’t conform to the banker ► Unique approach compared First selec
Slide 49: Contact Investor Relations
Contact Investor Relations Contact details Financial calendar Date Place Event information Investor relations ProCredit Holding AG & Co. KGaA 15./16.02.2017 Frankfurt/ Main Oddo Seydler 11th German Conference Nadine Frerot 21./22.03.2017 The Hague Impact Summit Europe tel.: +49 69 951 437 285 e-mail
Slide 50: Update as of 03.05.2017
Update as of 03.05.2017 Slide 19: − PAR 30 was adjusted to 4.4% as disclosed in the Annual Report 2016. Slide 21: − In the graph “Overview of growth in the last three years”, the split between business clients and private clients, and in the graph “Structure of green loan portfolio”, the distributio
Slide 51: Disclaimer
Disclaimer The material in this presentation and further supporting documents have been prepared by ProCredit Holding AG & Co. KGaA, Frankfurt am Main, Federal Republic of Germany (“ProCredit Holding”) and are general background information about the ProCredit group’s activities current as at the da