Procredit Holding Ag · XETR:PCZ
Procredit — Q1 2020 Earnings Presentation
41 slides from Procredit's earnings presentation, May 14, 2020
Slide 1: Q1 2020 results
Dr Gabriel Schor, Member of the Management Board Christian Dagrosa, Manager Q1 2020 results Frankfurt am Main, 14 May 2020
Slide 2: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q1 2020 results | Frankfurt am Main, 14 May 2020 1
Slide 3: ProCredit in the current market environment
ProCredit in the current market environment Steady Q1 results in line with expectations ► 0.9% growth in customer loans; steady customer deposit base ► Solid profit of the period of EUR 13.7m (RoE 7.0%), up by EUR 3.0m yoy, with: Increase in net interest income (up 12.2% yoy) Cost of risk in lin
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 ► Infection and death rates are currently comparatively lower than in Western Europe ► Nonetheless, very different situations in different countries
Slide 5: Ensuring Business Continuity
Ensuring Business Continuity Group-wide measures taken Stable business operations at PCH and all banks ► Comprehensive internal measures for safety of staff are taken ► Stable operations with no impact visible e.g. on payments or level of transactions ► Strong support from Quipu relating to IT suppo
Slide 6: Steady development in customer loans
Steady development in customer loans Total loan portfolio growth ► Continued growth in customer loan portfolio Q1 growth of EUR 42 million, including EUR 50 million FX effects ► 93% of loans are business loans ► Continued growth of green loan portfolio with focus on renewable energy loans Green lo
Slide 7: Good deposit development through digital banking channels
Good deposit development through digital banking channels Deposits by type of client ► YoY increase of EUR 490m (+13%) 4,259 3,769 Achieved through growth in business and private 3,444 client deposits 2,242 1,569 1,887 Decline in Q1 of EUR 74m driven by seasonality and FX effects (in EUR m) ► Vi
Slide 8: Portfolio and credit risk update
Portfolio and credit risk update Update as of mid-April Loan portfolio in moratorium by sector ► Outreach to all business clients within a few weeks after outbreak EUR m of the pandemic Total Business 764 No strong deterioration in loan portfolio quality yet Trade 266 Production 205 Macroeconomi
Slide 9: Q1 2020 results versus guidance
Q1 2020 results versus guidance Guidance Actuals 2020 Q1 2020 ► Growth of the loan portfolio low single digit percentage increase 0.9% ► Return on average equity (RoAE) positive, but lower compared to FY 2019 7.0% ► Cost-income ratio (CIR) c. 70% 64.6% ► CET1 ratio > 13% 14.0% ► Dividend payout rati
Slide 10: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q1 2020 results | Frankfurt am Main, 14 May 2020 9
Slide 11: Q1 2019 and Q1 2020 results at a glance
Q1 2019 and Q1 2020 results at a glance In EUR m Q1-2019 Q1-2020 y-o-y Net interest income 45.4 50.9 5.5 Provision expenses 2.1 6.9 4.8 Net fee and commission income 12.7 12.0 -0.8 Net result of other operating income 0.9 1.8 0.9 Operating income 57.0 57.8 0.8 Income Operating expenses 41.2 41.8 0.6
Slide 12: Net interest income
Net interest income ► Net interest income stable on strong levels of Q3 and Q4 3.2% 2019 3.1% 3.1% 3.1% 3.1% ► Significant yoy increase of 12.2%, driven by growth in loan portfolio 51.0 50.9 50.9 47.3 45.4 ► Net interest margin stable at 2019 level of 3.1% (in EUR m) Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 (1
Slide 13: Provisioning expenses
Provisioning expenses 57 bps ► Increase in Q1 loan loss provisioning expenses in line with expectations ► Increase is primarily related to updated macroeconomic assumptions within the credit risk model as a consequence 19 bps of the Covid-19 pandemic 18 bps 6.9 2.1 2.0 Increase of Stage 1 and Stag
Slide 14: Net fee and commission income
Net fee and commission income ► Quarterly net fee income at EUR 12.0m, decreased from previous quarters 12.7 13.1 13.1 13.1 12.0 ► Key drivers are seasonality (typically weaker Q1 compared to rest of the year) and decreased transaction volume as consequence of COVID-19 lockdowns Yoy reduction of E
Slide 15: Operating expenses
Operating expenses ► Steady cost base below the previous three quarters – on 76.6% the same level as Q1 2019 69.8% 71.6% 64.2% 64.6% 21.2 Yoy increase in personnel expenses driven by slightly higher staff number 19.6 20.3 20.6 19.1 Savings in administrative expenses supported by lower marketing
Slide 16: 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 232m customer
Slide 17: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q1 2020 results | Frankfurt am Main, 14 May 2020 16
Slide 18: Structure of the loan portfolio
Structure of the loan portfolio Loan portfolio by geographical segments Loan portfolio by sector Investment and other Ecuador Germany Housing loans 1% 1% Moldova 6% Bulgaria 6% 3% 20% Wholesale and Georgia Other retail trade 7% economic 27% activities 19% Ukraine 12% Transportation Serbia and storag
Slide 19: Loan portfolio quality
Loan portfolio quality IFRS 9(4) ► Share of default loans further reduced by 10bps since Dec-19 (EUR 3m in absolute terms) Net write- 0.4% 0.3% 0.0% offs(1)(3) ► Strong coverage of 95.5% Coverage impaired 90.8% 89.1% 95.5% Coverage excluding collateral, which generally consists of portfolio(2) mor
Slide 20: 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 21: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q1 2020 results | Frankfurt am Main, 14 May 2020 20
Slide 22: Asset reconciliation
Asset reconciliation ProCredit Group | Q1 2020 results | Frankfurt am Main, 14 May 2020 21
Slide 23: Liabilities and equity reconciliation
Liabilities and equity reconciliation Debt securities ProCredit Group | Q1 2020 results | Frankfurt am Main, 14 May 2020 22
Slide 24: Liquidity update
Liquidity update Liquidity coverage ratio 174% 181% ► Q1 reduction of HLAs of c EUR 150m 170% 100% 100% 100% Driven by seasonality and fx effects ► LCR remains comfortably above the regulatory minimum, in spite of reduced anticipated repayments due to Mar-18 Mar-19 Mar-20 moratoria in April LCR ra
Slide 25: Regulatory capital and risk-weighted assets
Regulatory capital and risk-weighted assets in EUR m Dec-19 Mar-20 ► Capital ratios on solid level, with minor decrease compared to YE 2019 CET1 capital 742 715 Additional Tier 1 capital 0 0 Reduction in CET 1 capital driven primarily by fx effects (reduction in the translation reserve) Tier 1 cap
Slide 26: Development of CET1 capital ratio (fully loaded)
Development of CET1 capital ratio (fully loaded) ProCredit Group | Q1 2020 results | Frankfurt am Main, 14 May 2020 25
Slide 27: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q1 2020 results | Frankfurt am Main, 14 May 2020 26
Slide 28: Q&A ProCredit Bank Georgia
Q&A ProCredit Bank Georgia ProCredit Group | Q1 2020 results | Frankfurt am Main, 14 May 2020 27
Slide 29: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q1 2020 results | Frankfurt am Main, 14 May 2020 28
Slide 30: ProCredit – A unique approach to banking
ProCredit – A unique approach to banking Summary Key figures Q1 2020 and FY 2019 ► A profitable, development-oriented commercial group of banks for Total assets Customer loan portfolio Deposit/loan(1) SMEs with a focus on South Eastern Europe and Eastern Europe EUR 6,595m EUR 4,839m 88% ► Headquarte
Slide 31: Overview of quarterly financial development
Overview of quarterly financial development In EUR m Q1-2019 Q2-2019 Q3-2019 Q4-2019 Q1-2020 Net interest income 45.4 47.3 51.0 50.9 50.9 Provision expenses 2.1 2.0 -1.7 -5.7 6.9 Net fee and commission income 12.7 13.1 13.1 13.1 12.0 Net result of other operating income 0.9 -1.3 2.4 0.8 1.8 Operatin
Slide 32: Segment South Eastern Europe
Segment South Eastern Europe Regional loan portfolio breakdown Key financial data Bosnia (in EUR m) Q1 2019 Q1 2020 Albania 6% 6% Net interest income 26.8 28.0 Bulgaria Romania 28% Provision expenses 0.3 3.0 9% Net fee and commission income 9.0 8.3 Net result of other operating income 0.4 1.2 North
Slide 33: Segment Eastern Europe
Segment Eastern Europe Regional loan portfolio breakdown Key financial data Moldova (in EUR m) Q1 2019 Q1 2020 13% Net interest income 14.4 17.3 Provision expenses 2.3 2.6 Net fee and commission income 2.3 2.3 Net result of other operating income 0.9 2.0 Operating income 15.2 19.0 Georgia Ukraine Op
Slide 34: Segment South America
Segment South America Regional loan portfolio breakdown Key financial data (in EUR m) Q1 2019 Q1 2020 Net interest income 3.8 4.7 Provision expenses -0.5 1.0 Net fee and commission income -0.1 -0.1 Net result of other operating income -0.2 0.0 Ecuador 100% Operating income 4.0 3.6 Operating expenses
Slide 35: Development of green loan portfolio
Development of green loan portfolio Green loan portfolio growth 9.1% 12.6% 15.4% 16.6% 16.7% ► Despite of the COVID 19 situation and general stagnation in investments in late Q1, green portfolio showed a growth of 795 807 1.4% compared to Q4 in 2019 17 16 678 15 ► Includes financing of investments i
Slide 36: Structure of the loan portfolio (continued)
Structure of the loan portfolio (continued) Loan portfolio by exposure Loan portfolio by currency 8% 30% 33% 21% 56% 14% 11% 27% < 50k 50-250k 250-500k 500k-1.5m >1.5m EUR USD Other currencies Notes: Loan portfolio by geographical segments and by sector in % of gross loan portfolio (EUR 4,839m as pe
Slide 37: Funding and rating
Funding and rating Funding sources overview 6% 2% 1% ► Highly diversified funding structure and counterparties 4% ► Customer deposits main funding source, accounting for 73%, Customer deposits supplemented by long-term funding from IFIs and 14% institutional investors Liabilities to IFIs Liabilities
Slide 38: Balance sheet
Balance sheet in EUR m Mar-20 Dec-19 Assets Cash and central bank balances 1,140 1,082 Loans and advances to banks 190 321 Investment securities 314 378 Loans and advances to customers 4,839 4,797 Loss allowance for loans to customers -111 -106 Derivative financial assets 2 0 Property, plant and equ
Slide 39: Income statement by segment
Income statement by segment 01.01.- 31.03.2020 South Eastern Germany Eastern Europe South America Consolidation Group (in EUR m) Europe Interest and similar income 5.9 35.3 35.9 7.8 -5.4 79.5 of which inter-segment 5.4 0.2 -0.1 0.0 0.0 0.0 Interest and similar expenses 5.5 18.0 7.8 3.1 -5.9 28.6 of
Slide 40: Contact Investor Relations
Contact Investor Relations Contact details Financial calendar (continuously updated on IR Website) Investor Relations Date Place Event information ProCredit Holding AG & Co. KGaA Fürth- 26.05.2020 (virtual) Annual General Meeting Investor Relations Team Weschnitz 30.06. – Equity Forum tel.: + 49 69
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