Procredit Holding Ag · XETR:PCZ

Procredit — ProCredit Holding AG & Co. KGaA — FY2020 Earnings Presentation

43 slides from Procredit's earnings presentation, Mar 25, 2021

  1. Slide 1: Q4 2020 / FY 2020 results

    Dr Gabriel Schor, Member of the Management Board Christian Dagrosa, Manager Q4 2020 / FY 2020 results Frankfurt am Main, March 2021

  2. Slide 2: Agenda

    Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q4 / FY 2020 results | Frankfurt am Main, 25 March 2021 1

  3. Slide 3: Highlights 2020

    Highlights 2020 Strong business growth despite challenging conditions; further strengthening market position ► Customer loans grew by 9.5% (Q4: 0.9%) with core SME clients, most of which in investment and in green loans: Reinforcing impact positioning as reliable partner in a market context where bu

  4. Slide 4: FY 2020 results versus guidance

    FY 2020 results versus guidance Guidance Actuals FY 2020 FY 2020 ► Growth of the loan portfolio(1) 8% – 10% 9.5%  positive, but lower compared ► Return on equity (RoE) to FY 2019 5.3%  ► Cost-income ratio (CIR) c 70% 68.0%  ► CET1 ratio > 13% 13.3%  Dividend accrual ► Dividend payout ratio 1/3 o

  5. 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 ► Initially lower infection and death rates in Eastern Europe have converged with higher numbers of Western Europe in the second half-year 2020 and

  6. Slide 6: Steady development in customer loans

    Steady development in customer loans Loan portfolio growth in 2020 ► Continued strong growth in customer loans +9.5% (YTD EUR 457m/9.5%; Q4 EUR 49m/0.9%) 190 5,254 19% 195  Continued lending to business clients resulting in increased market share as overall business lending 72 48% muted 4,797  Gro

  7. Slide 7: Good deposit development through digital banking channels

    Good deposit development through digital banking channels ► YOY increase of EUR 565m (+13%) Deposits by product  Achieved mostly through growth in business but also private client deposits 4,899 4,333  Increased share of sight deposits and FlexSave 3,795 (up 4pp YoY to 68%), with positive impact o

  8. Slide 8: ProCredit is committed to foster sustainability – Impact report 2020 published

    ProCredit is committed to foster sustainability – Impact report 2020 published Responsible banking Environmental responsibility Investments in staff development ► No focus on consumer lending, ► Focus on green investments, 31% ► Unique approach to staff recruitment no complex products average growth

  9. Slide 9: Outlook for ProCredit Group

    Outlook for ProCredit Group Outlook 2021: ► Growth of the loan portfolio c. 10% ► Return on equity (RoE) 6.0 – 7.5% (assuming still elevated cost of risk, but slightly lower than in 2020) ► Cost-income ratio (CIR) 65 – 68% ► CET1 ratio and leverage ratio c. 13% and c. 9%, respectively ► Dividend pay

  10. Slide 10: Agenda

    Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q4 / FY 2020 results | Frankfurt am Main, 25 March 2021 9

  11. Slide 11: Q4 2020 results at a glance

    Q4 2020 results at a glance In EUR m Q4-2019 Q4-2020 FY-2019 FY-2020 y-o-y Net interest income 50.9 50.8 194.5 201.6 7.0 Provision expenses -5.7 7.5 -3.3 28.6 31.9 Net fee and commission income 13.1 12.7 52.0 47.4 -4.6 Net result of other operating income 0.8 0.5 2.8 3.2 0.4 Operating income 70.5 56

  12. Slide 12: Net interest income

    Net interest income ► In Q4-20, net interest income stable on the level of Q3-20 3.1%  Loan growth compensating slight decrease in NIM 3.1% 2.9% 2.9% 2.8%  Decline in NIM (c. 10bps in Q4) partly driven by high 50.9 50.9 50.8 50.8 excess liquidity 49.0  Majority of banks with stable trend in NII (

  13. Slide 13: Provisioning expenses

    Provisioning expenses ► Q4-20 loan loss provisioning expenses at 57bp broadly on 71 bps the level of the entire year 57 bps  Q4-20 expenses driven by 2nd parameter update based on latest IMF macroeconomic forecast from Oct-20 57 bps 42 bps (c. EUR 11m) 8.8  Impact from changes in credit risk, incl

  14. Slide 14: Net fee and commission income

    Net fee and commission income ► Q4-20 net fee and commission income showing continued good development, increase of +5% QoQ (EUR 0.6m) 13.1 12.7  Overall, net fee income stabilizing at level of close to 12.0 12.1 EUR 13m, i.e. on pre-pandemic level 10.6  Number and volume of transactions visibly r

  15. Slide 15: Operating expenses

    Operating expenses ► Operating expenses with seasonal increase in Q4-20, 76.6% however, markedly below the level of Q4-19 68.5% 72.3% 64.6% 66.7%  Increased personnel expenses due to provisions for 21.2 untaken vacation in pandemic year 22.4 20.6 20.7  Impact of restructuring in Romanian bank refl

  16. Slide 16: Contribution of segments to group net income (FY 2020)

    Contribution of segments to group net income (FY 2020) 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 53m customer loan portfolio; EUR 273

  17. Slide 17: Key data per bank (FY 2020)

    Key data per bank (FY 2020) North Bosnia & Country Bulgaria Serbia Kosovo Romania Macedonia Herzegovina Customer loan portfolio(1) (EUR m) 1,099 945 535 424 344 238 Change in customer loan portfolio(1) (%) 16.5% 14.4% 2.3% 12.4% 17.6% 13.9% Credit impaired loans (Stage 3) 2.5% 1.2% 3.4% 1.4% 1.7% 2.

  18. Slide 18: Agenda

    Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q4 / FY 2020 results | Frankfurt am Main, 25 March 2021 17

  19. Slide 19: Structure of the loan portfolio

    Structure of the loan portfolio Loan portfolio by geographical segments Loan portfolio by sector Investment and Ecuador Germany other loans Housing 1% 6% 1% Moldova 5% 3% Bulgaria Wholesale and 21% retail trade Georgia 7% 26% Other economic activities 21% Ukraine 11% Transportation Bosnia Serbia and

  20. Slide 20: Loan portfolio quality

    Loan portfolio quality ► Stable level of Stage-3 loans during 2020, slightly higher IFRS 9 than 2019, reflecting strong overall loan portfolio quality ► New EBA disclosure requirements on credit-impaired loans Net write- 0.4% 0.3% 0.1% offs(1)(3) led to a 37bps increase in Stage 3 loans in Q4-20 Cov

  21. Slide 21: Portfolio quality management and credit risk costs

    Portfolio quality management and credit risk costs Portfolio quality management during FY 2020 ► Credit risk managed tightly on an individual client level vs. portfolio level  Carefully selected clients and continued strict collateral requirements  Portfolio in moratorium below 2% as of Dec-20  I

  22. Slide 22: Structure of collateral

    Structure of collateral Collateral by type ► Majority of collateral consists of mortgages ► Growing share of financial guarantees mainly as a result of 19% InnovFin and other guarantee programmes provided by the European Investment Fund ► Clear, strict requirements regarding types of acceptable coll

  23. Slide 23: Agenda

    Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q4 / FY 2020 results | Frankfurt am Main, 25 March 2021 22

  24. Slide 24: Asset reconciliation

    Asset reconciliation Other 11% assets Cash and 19% cash equivalents Net loans to 70% customers ProCredit Group | Q4 / FY 2020 results | Frankfurt am Main, 25 March 2021 23

  25. Slide 25: Liabilities and equity reconciliation

    Liabilities and equity reconciliation 17% Liabilities to banks and IFIs Liabilities to 67% customers (in EUR m) Debt 4% Other liabilities 1% securities 1% Subordinated debt Equity 11% ProCredit Group | Q4 / FY 2020 results | Frankfurt am Main, 25 March 2021 24

  26. Slide 26: Regulatory capital and risk-weighted assets

    Regulatory capital and risk-weighted assets in EUR m Dec-19 Dec-20 ► Capital ratios well above regulatory capital requirements CET1 capital 742 706 (8.2% CET1 capital, 10.1% T1, 12.6% total capital) ► CET1 capital includes interim profits for Q1 and Q2 2020, Additional Tier 1 capital 0 0 with interi

  27. Slide 27: Development of CET1 capital ratio (fully loaded)

    Development of CET1 capital ratio (fully loaded) Increased excess liquidity Includes impact from new temporarily placed at central EBA default definition banks (+ EUR 87m qoq) based H2-20 attributable profits net of (increase in RWA of c. on strong Q4 growth in deposits dividend accrual of 1/3; tota

  28. Slide 28: Agenda

    Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q4 / FY 2020 results | Frankfurt am Main, 25 March 2021 27

  29. Slide 29: Q&A

    Q&A ProCredit Bank Georgia ProCredit Group | Q4 / FY 2020 results | Frankfurt am Main, 25 March 2021 28

  30. Slide 30: Agenda

    Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q4 / FY 2020 results | Frankfurt am Main, 25 March 2021 29

  31. Slide 31: ProCredit – A unique approach to banking

    ProCredit – A unique approach to banking Summary Key figures FY 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 7,329m EUR 5,254m 93% ► Headquarte

  32. Slide 32: Overview of quarterly financial development

    Overview of quarterly financial development In EUR m Q4-2019 Q1-2020 Q2-2020 Q3-2020 Q4-2020 Net interest income 50.9 50.9 49.0 50.8 50.8 Provision expenses -5.7 6.9 8.8 5.4 7.5 Net fee and commission income 13.1 12.0 10.6 12.1 12.7 Net result of other operating income 0.8 1.8 0.3 0.6 0.5 Operating

  33. Slide 33: Segment South Eastern Europe

    Segment South Eastern Europe Regional loan portfolio breakdown Key financial data Bosnia Albania 6% (in EUR m) FY 2019 FY 2020 6% Bulgaria Net interest income 110.5 117.3 Romania 29% 9% Provision expenses -4.9 13.7 Net fee and commission income 35.9 31.4 North Net result of other operating income -3

  34. Slide 34: Segment Eastern Europe

    Segment Eastern Europe Regional loan portfolio breakdown Key financial data Moldova (in EUR m) FY 2019 FY 2020 14% Net interest income 66.9 62.8 Provision expenses 2.1 11.2 Net fee and commission income 9.7 8.3 Net result of other operating income 5.0 5.5 Ukraine Operating income 79.6 65.4 54% Georg

  35. Slide 35: Segment South America

    Segment South America Regional loan portfolio breakdown Key financial data (in EUR m) FY 2019 FY 2020 Net interest income 16.8 18.6 Provision expenses -0.4 3.6 Net fee and commission income -0.5 -0.3 Ecuador Net result of other operating income -0.7 -0.8 100% Operating income 16.0 14.0 Operating exp

  36. Slide 36: Development of green loan portfolio

    Development of green loan portfolio Green loan portfolio growth ► Continued strong growth of green loan portfolio during 9.1% 12.6% 15.4% 16.6% 18.7% Q4-20 by 3.3% 985 21 ► Includes financing of investments in: 795 678 17 • Energy efficiency 15 489 • Renewable energies 14 964 • Other environmentally

  37. Slide 37: Structure of the loan portfolio

    Structure of the loan portfolio Loan portfolio by exposure Loan portfolio by currency 8% 33% 35% 19% 55% 14% 10% 26% < 50k 50-250k 250-500k 500k-1.5m >1.5m EUR USD Other currencies Notes: Loan portfolio by exposure and by currency in % of gross loan portfolio(EUR 5,254m as per 31-December-20) ProCre

  38. Slide 38: Funding and rating

    Funding and rating Funding sources overview 1% 4% 1% ► Highly diversified funding structure and counterparties 4% ► Customer deposits main funding source, accounting for 75%, 15% Customer deposits supplemented by long-term funding from IFIs and Liabilities to IFIs institutional investors Liabilities

  39. Slide 39: Liquidity update

    Liquidity update Liquidity coverage ratio ► LCR remains comfortably above the regulatory minimum 187% 198% 153% ► Increase of HLAs mainly driven by strong deposit growth 100% 100% 100% ► No visible deterioration of liquidity since the outbreak of COVID-19 pandemic Dec-18 Dec-19 Dec-20 LCR ratio Regu

  40. Slide 40: Balance sheet

    Balance sheet in EUR m Dec-20 Dec-19 Assets Cash and central bank balances 1,405 1,082 Loans and advances to banks 237 321 Investment securities 336 378 Loans and advances to customers 5,254 4,797 Loss allowance for loans to customers -123 -106 Derivative financial assets 1 0 Property, plant and equ

  41. Slide 41: Income statement by segment

    Income statement by segment 01.01.- 31.12.2020 South Eastern Germany Eastern Europe South America Consolidation Group (in EUR m) Europe Interest and similar income 24 120 147 32 -21 302 of which inter-segment 21 0 0 0 0 0 Interest and similar expenses 23 57 30 13 -23 100 of which inter-segment 1 8 9

  42. Slide 42: 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 Quarterly Financial Report as of 31 March 12.05.2021 Investor Relations Team 2021 Equity Forum tel.: + 49 69 951 437 300

  43. Slide 43: 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

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