Procredit Holding Ag · XETR:PCZ
Procredit — Q1 2017 Earnings Presentation
44 slides from Procredit's earnings presentation, May 15, 2017
Slide 1: Q1 2017 results
Q1 2017 results Frankfurt am Main, 15th May 2017 (updated as of 16.05.2017) 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 Q1 2017 and FY 2016 ► A profitable, development-oriented commercial banking group for SMEs Total assets Customer loan portfolio(1) Deposits/loans(2) with focus on South Eastern Europe and Eastern Europe EUR 5,525m EUR 3,720m 91% ► Headquar
Slide 3: “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 4: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q1 2017 results | Frankfurt am Main, 15th May 2017 4
Slide 5: Where do we come from? Significant progress since 2013
Where do we come from? Significant progress since 2013 Focused growth in SME loan categories (1) Decrease in number of cash desk transactions 28% 2% Dec-13 Mar-17 YTD Cash desk transactions in % total transactions Regional focus on South Eastern Europe and Eastern Europe Decrease in number o
Slide 6: Recent key achievements
Recent key achievements Execution of business client strategy ► Very strong growth with target SME clients in Eastern Europe (+5% loan portfolio growth > EUR 30k in Q1 2017) ► On track for sharp business profile as modern SME bank for Eastern Europe: 83% of loan portfolio with SMEs, 90% of loan po
Slide 7: Social Stock Exchange Membership ProCredit Holding Impact Report 2016
Social Stock Exchange Membership ProCredit Holding Impact Report 2016 ► Approval as member of the Social Stock Exchange (SSX) following the ratification of the Impact Report by the independent SSX Admissions Panel in May-17 ► Impact Report details the social impact of the group focusing on three mai
Slide 8: Strong volume growth in core loan categories
Strong volume growth in core loan categories Q1 2017 -7% (EUR -48m) 5% (EUR +144m) +3% (in EUR m) Initial loan size (in EUR k) Remaining stock EUR 171 m EUR 452 m FY 2016 -28% (EUR -256m) 13% (EUR +336m) +2% (in EUR m) Initial loan size (in EUR k) Note: Loan volume growth split by initial loan size
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) ca. 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-ter
Slide 10: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q1 2017 results | Frankfurt am Main, 15th May 2017 10
Slide 11: Q1 2017 results at a glance
Q1 2017 results at a glance (in EUR m) Q1-2016 Q1-2017 y-o-y Net interest income 60.7 51.3 -15% Provision expenses 9.4 3.0 -68% Net fee and commission income 10.7 10.7 0% Net result of other operating income -0.8 2.0 n.m. Operating income 61.2 61.1 0% Income Operating expenses 47.3 47.3 0% statement
Slide 12: Net interest income
Net interest income ► Decreased net interest income impacted mainly due to 60.7 the strategic decline of the loan portfolio with loan sizes 58.2 56.7 < EUR 30k and general market trend 55.3 51.3 ► Q1 2017 decrease in net interest margin impacted by run-off of loans < EUR 30k, selected portfolio sale
Slide 13: Provisioning expenses
Provisioning expenses ► Allowances for losses on loans and advances to 107 bps customers (LLP) continues to be on low levels with comfortable PAR 30 coverage ratio (102%) 9.4 ► Decrease in LLP/cost of risk driven by improved loan portfolio quality and recovery of written-off loan portfolio ► Slight
Slide 14: Net fee and commission income
Net fee and commission income 10.7 10.9 10.9 10.7 ► Significantly reduced number of cash transactions 10.4 leading to negative impact on net fee income but positive impact on personnel and administrative costs ► Increase in account maintenance and card transaction income compensated declining fee in
Slide 15: Operating expenses
Operating expenses 78.1% 71.4% 73.8% 68.9% 67.0% ► Operating expenses below average FY 2016 levels 53.8 49.2 48.0 22.1 ► Cost base positively influenced by 47.3 47.3 22.1 21.8 22.1 21.7 ► Lower number of total staff ► Lower administrative expenses, as a result of reduced and modernised branch networ
Slide 16: Contribution of segments to group net income
Contribution of segments to group net income Group functions such as e.g. risk management, reporting, capital Profit contribution (after tax of EUR 2.4m) management, liquidity management, training and development from entities in El Salvador and Nicaragua Includes ProCredit Holding, Quipu, ProCredit
Slide 17: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q1 2017 results | Frankfurt am Main, 15th May 2017 17
Slide 18: 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 customer loan portfolio (EUR 3,720m as per 31-Mar-17) ProCredit Group | Q1 2017 results | Frankfurt am Main, 15th May 2017 18
Slide 19: 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 3,700m as per 31-Mar-17); loan portfolio by currency in % of net loan portfolio (EUR 3,567m as per 31-Mar-17)
Slide 20: Loan portfolio quality
Loan portfolio quality Net write-offs(1) 0.7% -0.1% ► Net write-off development due to high Coverage ratio 66% 65% recoveries in Q1 2017 impaired(2) Coverage ratio 106% 102% ► Stable low portfolio at risk PAR 30(3) Impaired ► Prudent risk management underlined by loans 6.3% 6.3% high coverage ratios
Slide 21: Structure of collateral
Structure of collateral Collateral by type ► Majority of collateral is mortgages ► Clear and strict requirements regarding types of acceptable collateral, legal aspects of collateral and insurance of collateral items ► Standardised collateral valuation methodology ► Regular monitoring of the value o
Slide 22: Development of green loan portfolio
Development of green loan portfolio Green loan portfolio growth ► Strong growth of the green loan portfolio (38% p.a. 3.0% 4.0% 6.4% 9.1% 9.7% 2013-2016) ► Includes credit products for investments in ► Energy efficiency ► Renewable energies ► Other environmentally-related activities ► Ambition of mi
Slide 23: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q1 2017 results | Frankfurt am Main, 15th May 2017 23
Slide 24: Asset reconciliation
Asset reconciliation Reduction of surplus liquidity (cyclical Q1 effect and sale of Banco Los Andes ProCredit Bolivia) Strong growth in core loan segment + EUR 144m; further decline in loans < EUR 30k Other 13% assets Assets held 8% for sale Cash and cash 14% equivalents (in EUR m) Net loans 65% to
Slide 25: Liabilities and equity reconciliation
Liabilities and equity reconciliation Decrease driven by seasonal decline of current account balances Contains EUR 11.6m retained earnings and Repayment of maturing EUR 3.3m increase of translation reserve liabilities 6% Liabilities to banks (in EUR m) 61% Liabilities to customers Liabilities to Deb
Slide 26: Liquidity update
Liquidity update Liquidity coverage ratio ► Comfortable liquidity situation 194% 145% ► Excess liquidity in December 2016 due to sale of Banco Los Andes ProCredit Bolivia 70% 80% and seasonal increase of current account balances Dec-16 Mar-17 ► Comfortable HLA and HLA ratio LCR ratio Regulatory mini
Slide 27: Regulatory capital and RWA
Regulatory capital and RWA Overview of capitalisation (in EUR m) Dec-16 Mar-17 ► Stable CET1, Total Capital and Leverage ratios CET1 capital (net of deductions) 574 577 Additional Tier 1 capital (net of deductions) 0 0 ► Q4 2016 profits not yet recognised (after Annual General Meeting) Tier 1 capita
Slide 28: Development of CET1 capital ratio (fully loaded)
Development of CET1 capital ratio (fully loaded) Leverage ratio (fully loaded) 10.1% ProCredit Group | Q1 2017 results | Frankfurt am Main, 15th May 2017 28
Slide 29: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q1 2017 results | Frankfurt am Main, 15th May 2017 29
Slide 30: Q&A
Q&A ProCredit Bank Kosovo ProCredit Group | Q1 2017 results | Frankfurt am Main, 15th May 2017 30
Slide 31: Agenda
Agenda A Highlights B Financial development C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q1 2017 results | Frankfurt am Main, 15th May 2017 31
Slide 32: Strong volume growth in core loan categories
Strong volume growth in core loan categories Q1 2017 vs Q1 2016 Q1 2017 -7% (EUR -48m) 5% (EUR +144m) +3% (in EUR m) Initial loan size (in EUR) Remaining stock EUR 171 m EUR 452 m Q1 2016 -7% (EUR -63m) 1% (EUR +16m) -1% (in EUR m) Initial loan size (in EUR) Note: Loan volume growth split by initial
Slide 33: Overview of quarterly financial development
Overview of quarterly financial development (in EUR m) Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Net interest income 60.7 58.2 56.7 55.3 51.3 Provision expenses 9.4 4.5 2.9 1.8 3.0 Net fee and commission income 10.7 10.9 10.4 10.9 10.7 Net result of other operating income -0.8 -0.1 2.4 2.6 2.0 Operating income
Slide 34: Segment South Eastern Europe
Segment South Eastern Europe Regional loan portfolio split Key financial data (in EUR m) Q1 2016 Q1 2017 Net interest income 40.0 33.4 Provision expenses 4.9 0.1 Net fee and commission income 7.5 7.4 Net result of other operating income -0.1 0.2 Operating income 42.5 40.8 Operating expenses 27.1 25.
Slide 35: Segment Eastern Europe
Segment Eastern Europe Regional loan portfolio split Key financial data (in EUR m) Q1 2016 Q1 2017 Net interest income 15.0 13.3 Provision expenses 4.0 3.1 Net fee and commission income 2.1 2.1 Net result of other operating income -0.3 0.8 Operating income 12.9 13.0 Operating expenses 8.0 7.8 Operat
Slide 36: Segment South America
Segment South America Regional loan portfolio split Key financial data (in EUR m) Q1 2016 Q1 2017 Net interest income 6.3 5.7 Provision expenses 0.6 -0.3 Net fee and commission income 0.0 0.0 Net result of other operating income 0.8 0.0 Operating income 6.5 6.0 Operating expenses 6.8 7.0 Operating r
Slide 37: Funding and rating update
Funding and rating update Funding sources overview ► Highly diversified funding structure and counterparties 1% 3% 4% 7% ► Customer deposits main funding source, Customer deposits accounting for 75% as of Mar-17 10% Liabilities to IFIs ► Supplemented by long-term funding from Liabilities to banks IF
Slide 38: 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
Slide 39: Balance sheet
Balance sheet (in EUR m) Dec-16 Mar-17 Assets Cash and cash equivalents 937 773 Loans and advances to banks 287 264 Financial assets at fair value through profit and loss 0 0 Available-for-sale financial assets 250 207 Loans and advances to customers 3,629 3,720 Allowance for losses on loans and adv
Slide 40: Income statement by segment
Income statement by segment 01.01.- 31.03.2017 (in EUR m) Germany Eastern Europe South Eastern Europe South America Consolidation Group Interest and similar income 4.7 24.3 38.9 9.6 (4.4) 73.0 of which inter-segment 4.3 0.1 0.0 (0.0) 0.0 Interest and similar expenses 5.3 11.0 5.5 3.9 (4.0) 21.7 of w
Slide 41: Information regarding financial figures in this presentation
Information regarding financial figures in this presentation Q1 2017: − Financial data for three-month period ended March 31, 2017, as shown in the unaudited quarterly financial report ended March 31, 2017 − Entities classified as discontinued operations include Banco ProCredit El Salvador and Banco
Slide 42: Contact Investor Relations
Contact Investor Relations Contact details Financial calendar Date Place Event information Investor relations ProCredit Holding AG & Co. KGaA Quarterly Statement as of 31-Mar-17, Analyst 15.05.2017 Conference Call Nadine Frerot 17.05.2017 Frankfurt/ Main Annual General Meeting tel.: +49 69 951 437 2
Slide 43: Update as of 16.05.2017
Update as of 16.05.2017 Slide 40: − The positions “Net results from available-for-sale assets”, “Net other operating income”, “Operating income”, “Profit before tax”, “Profit of the period from continuing operations”, “Profit of the period” in the segments Germany and Consolidation were amended. Pro
Slide 44: 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