Procredit Holding Ag · XETR:PCZ
Procredit — Investor Presentation (February 2024)
32 slides from Procredit's investor presentation, Feb 14, 2024
Slide 1: An impact-oriented group of commercial banks with a focus on SMEs
An impact-oriented group of commercial banks with a focus on SMEs in South Eastern and Eastern Europe Analyst workshop, March 2023 (updated as of 14th February 2024)
Slide 2: Our mission
Our mission We strive to be the leading SME bank in our markets following sustainable and impact-oriented banking practices. Together with our fully digital offering to private clients, we want to generate long-term sustainable returns and create positive impact in the economies and societies we wor
Slide 3: Group positioning as Hausbank for SMEs in Eastern Europe
Group positioning as Hausbank for SMEs in Eastern Europe ProCredit Group | Analyst workshop | Frankfurt am Main, 24 March 2023 2
Slide 4: ProCredit at a glance
ProCredit at a glance Key elements of the ProCredit approach ProCredit at a glance ► An impact-oriented group of commercial banks with a Hausbank ProCredit Direct focus on SMEs in South Eastern and Eastern for SMEs for Private Clients Europe. Headquartered in Frankfurt and supervised by BaFin and Im
Slide 5: Impact orientation firmly integrated in the business model
Impact orientation firmly integrated in the business model Impact through Environmental Comprehensive staff Sustainable business business responsibility development model ► Supporting SMEs through ► Green loan portfolio ► High diversity, gender ► Long-term client the cycle > €1.2bn, avg. growth pari
Slide 6: Strong regional footprint across South Eastern and Eastern Europe
Strong regional footprint across South Eastern and Eastern Europe Well diversified loan portfolio Key macro drivers GDP growth outlook ► Strong footprint in (median real GDP growth p.a. 2024 - 27) Serbia Romania Moldova Ukraine SEE (72% of total EUR 928m EUR 351m EUR 176m EUR 582m 3.7% loan portfoli
Slide 7: We partner with SMEs – the ProCredit Hausbank principle
We partner with SMEs – the ProCredit “Hausbank” principle Our approach to SMEs is based both client relationship and technology ProCredit digital transformation Number of branches Number of group staff Target SME segment 11,514 645 -70% -93% Platform Relationship 3,437 banking banking Corporate 38 R
Slide 8: Track record of profitability through the economic cycle
Track record of profitability through the economic cycle Long-term financial stability and attractive profitability Average RoE: 8 – 9% 15% 75 80 50 61 61 10% 50 54 54 44 47 46 48 39 41 25 36 5% 30 in EUR m 28 16 0 12 13 0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2
Slide 9: Update on group medium-term guidance, key drivers and measures
Update on group medium-term guidance, key drivers and measures ProCredit Group | Analyst workshop | Frankfurt am Main, 24 March 2023 8
Slide 10: Strong track record of delivering on guidance
Strong track record of delivering on guidance Delivery on guidance Good operational progress and enhanced strategic priorities in past years driving update of group medium-term outlook FY 2017 ✓ Medium-term targets (previous) Management assessment / key milestones achieved FY 2018 ✓ ~10% loan portfo
Slide 11: Medium-term outlook with enhanced profitability level
Medium-term outlook with enhanced profitability level Medium-term outlook for ProCredit group ► Growth of the loan portfolio Medium to high single digit percentage growth p.a. ~12% ► Return on equity (RoE) (based on 25 – 30 bps risk cost over the cycle) ~57% ► Cost-income ratio (CIR) (without one-of
Slide 12: Lending strategy: Focus on profitable growth with target SME clients
Lending strategy Focus on profitable growth with target SME clients Competitive edge in focus on small to medium loan clients Selected key indicators and strategic direction Distribution of loan sizes in overall loan portfolio (€bn) ProCredit key strategic focus 64 k +3.5% c. 50% total # of SME grow
Slide 13: Lending strategy: 360° integrated view on client situation
Lending strategy 360° integrated view on client situation in all cases Clients’ overall needs apart of Ownership structure, management complementary to current request and capabilities & experience, organisation of the potential future business with the client Client profile company (e.g. succession
Slide 14: Lending strategy: Expansion of green loan portfolio
Lending strategy Expansion of green loan portfolio at attractive risk parameters Growing share of green loans, particularly renewable energy Key strategic direction Share of green Renewable energy Share of credit loan portfolio as % green loans impaired loans ► Leverage existing employees and techno
Slide 15: Refinancing strategy: Deposit growth through digital channels
Refinancing strategy Deposit growth mainly through digital banking channels ProCredit SME and private client approach driving deposits Selected key indicators and strategic direction Development of deposits by client group (€bn) 6.3 0.3% 1.8% 0.6% 5.5 0.6 25% cost of deposits cost of non-customer av
Slide 16: Supportive development of net interest income and fee income
Profitability enhancement Supportive development of net interest income and fee income Loan growth largest driver for operating income growth Key strategic direction Illustrative operating income development, illustrative ► Continuous growth with existing and new SME and private clients as main driv
Slide 17: Cost efficiency improvement largely through additional scale
Profitability enhancement Cost efficiency improvement largely through additional scale Operating leverage via scale and continued cost discipline Key strategic direction Illustrative development of operating income and expenses, illustrative ► Continued cost management and revenue expansion in order
Slide 18: Prudent risk management supporting over-the-cycle risk cost
Profitability enhancement Prudent risk management supporting over-the-cycle risk cost ProCredit key success factors of credit risk management Careful selection of clients Holistic client assessment Structured lending process Qualified staff 360° integrated view on client Comprehensive and Strict cli
Slide 19: Improvement of weaker banks driving group RoE
Profitability enhancement Improvement of ‘weaker’ banks driving group RoE Different sources for improved RoE level Key strategic direction Illustrative development of return on equity ► Group profitability enhancement driven by scaling operating income whilst increasing cost efficiency ► Normalisati
Slide 20: Potential upside from contribution of ProCredit Ukraine
Potential upside from contribution of ProCredit Ukraine to group profit depending on scenario ► Participation of PCB Ukraine in post-war reconstruction of the country and its infrastructure – recent estimations for Post-war reconstruction cost of reconstruction in the range of around EUR 400 billion
Slide 21: Capital strategy: Capital allocation, efficiency and distribution
Capital strategy Capital allocation, efficiency and distribution Prudent capitalisation levels Key strategic measures Capitalisation (fully-loaded), FY-22 13.5% 13.5% 14.3% ► Comfortable capitalisation levels to be maintained on all levels 8.9% ► Return to dividend payout assumed for FY 2023 profits
Slide 22: Outline of corporate development and capital market strategy
Outline of corporate development and capital market strategy ProCredit Group | Analyst workshop | Frankfurt am Main, 24 March 2023 21
Slide 23: Corporate development milestones and agenda
Corporate development milestones and agenda Continued strengthening of the impact-oriented … with further enhancing attractiveness from investor capital markets presence well under way … perspective on top of management agenda Selected milestones: Key targets: ► Listing of shares on Frankfurt Stock
Slide 24: Conversion into AG
Conversion into AG – strengthening the capital market presence of the group Milestones of Conversion into AG Strategic rationale ✓ Conversion embedded in the ongoing 14-Oct 2022 April 2023 05-Jun-23 Within 2023 strengthening of the corporate structure and capital market presence of the group ► Agree
Slide 25: ProCredit investment highlights
ProCredit investment highlights Well-diversified presence in our focus regions South Eastern and Eastern Europe – no large “home market” and HQ focused on enhancing group performance with standardized, best practice approaches implemented in all banks Impact-orientated, responsible approach underpin
Slide 26: Q&A
Q&A Photovoltaic project financed by ProCredit Bulgaria 25
Slide 27: Appendix
Appendix ProCredit Group | Analyst workshop | Frankfurt am Main, 24 March 2023 26
Slide 28: Example PCB Bosnia: Structural improvement of bank profitability
Example PCB Bosnia | Structural improvement of bank profitability Structural change of bank balance sheet as starting point … Loan portfolio (€m) Deposits (€m) Deposit / loan ratio 119% 340 285 +52pp +37% +144% Improved cost-income ratio 208 67% 139 100% -38pp 62% FY-19 FY-22 FY-19 FY-22 FY-19 FY-22
Slide 29: Prudent risk management as key pillar of our business model
Prudent risk management as key pillar of our business model and impact approach High quality loan portfolio built around ► Careful client selection and strong client relationships ► Well trained staff ► Effective group credit risk assessment and monitoring ► Solid risk profile with consistently low
Slide 30: 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 Local ProCredit banks 33 key management members Collective training… Hubert Spechtenhauser Dr Gian Marco Felice ► Central training in Fürth (Chairman) ► Eng
Slide 31: Notes
Notes General note Slide 7 Return on equity, net interest margin, cost of risk and net write-off ratio are RoE since 2005 as disclosed in “Bundesanzeiger” (German Federal Gazette) consistently annualised for all interim (quarterly and half-year) figures. Figures and ratios for Dec-13 relate to the d
Slide 32: Disclaimer
Disclaimer The material in this presentation and further supporting documents have This presentation and further supporting documents may contain forward- been prepared by ProCredit Holding AG & Co. KGaA, Frankfurt am Main, looking statements including statements regarding our intent, belief or Fede
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