Procredit Holding Ag · XETR:PCZ
Procredit — Q2 2020 Earnings Presentation
41 slides from Procredit's earnings presentation, Aug 13, 2020
Slide 1: Q2 2020 results
Dr Gabriel Schor, Member of the Management Board Christian Dagrosa, Manager Q2 2020 results Frankfurt am Main, 13 August 2020
Slide 2: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q2 2020 results | Frankfurt am Main, 13 August 2020 1
Slide 3: ProCredit in the current market environment
ProCredit in the current market environment Encouraging Q2 results against backdrop of challenging, but gradually steadying environment ► Good business growth: Strengthening market position while maintaining strict client selection criteria Customer loans Q2 growth of 4.4% (YTD 5.3%), reflecting i
Slide 4: ProCredit in the current market environment (continued)
ProCredit in the current market environment (continued) Focused and long-term-oriented business model of ProCredit continues to provide strong basis for managing prevailing challenging environment well ► Very efficient branch structure and digital approach to all routine banking transactions allows
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 ► Infection and death rates increased in the second quarter after many lockdown measures were lifted, but remain well below most Western European le
Slide 6: Portfolio and credit risk update
Portfolio and credit risk update Update as of mid-August ► Portfolio in moratorium declined to EUR 870m as of Q2-20 Serbia’s temporary opt-out moratorium expired on 30 June 2020, new two-month opt-out moratorium announced end-July Individual client approach to credit risk management; particular
Slide 7: Steady development in customer loans
Steady development in customer loans Loan Portfolio growth in Q2 2020 ► Strong growth in customer loans, above previous expectations (YTD EUR 255m/5.3%; Q2 EUR 213m/4.4%) +4.4% Recovery in demand for loans after drop in March and April Reduced lending activities of competitor banks Growth prim
Slide 8: Good deposit development through digital banking channels
Good deposit development through digital banking channels ► YOY increase of EUR 588m (+15%) Deposits by type of client Achieved through growth in business and private client deposits 4,447 3,859 Increased share of sight deposits and FlexSave 3,548 1,555 1,471 ► Strong increase in Q2 (4.2%) highl
Slide 9: H1 2020 results versus guidance
H1 2020 results versus guidance Guidance 2020 Actual (updated) H1 2020 8% – 10% (excl. fx effects) ► Growth of the loan portfolio 5.3% Previous: low single-digit percentage increase (1) ► Return on average equity (RoAE) positive, but lower compared to FY 2019 5.5% ► Cost-income ratio (CIR) c 70% 66.
Slide 10: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q2 2020 results | Frankfurt am Main, 13 August 2020 9
Slide 11: Q2 2020 results at a glance
Q2 2020 results at a glance Q2-2019 Q2-2020 H1-2019 H1-2020 y-o-y Net interest income 47.3 49.0 92.7 99.9 7.2 Provision expenses 2.0 8.8 4.1 15.7 11.6 Net fee and commission income 13.1 10.6 25.8 22.6 -3.2 Net result of other operating income -1.3 0.3 -0.4 2.1 2.5 Operating income 57.0 51.1 114.0 10
Slide 12: Net interest income
Net interest income ► In Q2-20, net interest income up 3.6% compared to Q2-19, with loan growth overcompensating decreased net interest 3.2% margin, but lower compared to Q1-20 3.1% 3.1% 3.1% 2.9% Portfolio growth during pandemic more focused on Upper Medium business client segment with inherently
Slide 13: Provisioning expenses
Provisioning expenses ► Increased Q2 loan loss provisioning expenses in line with 71 bps expectations 57 bps Increase in Stage 1 provisions (EUR 2.7m) driven primarily by portfolio growth and second update of macroeconomic parameters 8.8 6.9 18 bps Increase in Stage 2 provisions (EUR 1.7m) as re
Slide 14: Net fee and commission income
Net fee and commission income ► Quarterly net fee and commission income at EUR 10.6m, lower than in previous quarters 13.1 13.1 13.1 12.0 ► Fee income from money transfers and cards particularly 10.6 impacted by COVID-19 Significantly reduced number and volume of transactions Jun-20 indicating v
Slide 15: Operating expenses
Operating expenses ► Q2 operating expenses further reduced compared to 76.7% previous quarters 71.6% 68.5% 64.2% 64.6% 21.2 YTD expenses for transport and travel ca. EUR 1.2m below previous year due to travel restrictions 19.6 20.3 20.6 20.7 YTD expenses for marketing and depreciation of fixed a
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 55m customer loan portfolio; EUR 287m customer
Slide 17: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q2 2020 results | Frankfurt am Main, 13 August 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 5% 3% Wholesale and 20% Georgia Other retail trade 7% economic 26% activities 20% Ukraine 12% Transportation Serbia and storag
Slide 19: Loan portfolio quality
Loan portfolio quality IFRS 9 ► Share of default loans stable compared to Dec-19 Net write- 0.4% 0.3% 0.2% offs(1)(3) ► Strong coverage of 93.6% Coverage impaired 90.8% 89.1% 93.6% portfolio(2) Coverage excluding collateral, which generally consists of mortgages, cash and financial guarantees 5.3%
Slide 20: 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 20% InnovFin and other guarantee programmes provided by the European Investment Fund ► Clear, strict requirements regarding types of acceptable coll
Slide 21: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q2 2020 results | Frankfurt am Main, 13 August 2020 20
Slide 22: Asset reconciliation
Asset reconciliation ProCredit Group | Q2 2020 results | Frankfurt am Main, 13 August 2020 21
Slide 23: Liabilities and equity reconciliation
Liabilities and equity reconciliation Debt securities ProCredit Group | Q2 2020 results | Frankfurt am Main, 13 August 2020 22
Slide 24: Liquidity update
Liquidity update Liquidity coverage ratio ► Stable level of HLAs 161% 151% 142% ► LCR remains comfortably above the regulatory minimum; 100% 100% 100% the reduction of LCR compared to Q1-20 as a result of a slightly increased volume of maturing liabilities over the next 30 days Jun-18 Jun-19 Jun-20
Slide 25: Regulatory capital and risk-weighted assets
Regulatory capital and risk-weighted assets in EUR m Dec-19 Jun-20 ► Capital ratios broadly stable compared to Dec-19 and well above capital requirements (8.2% for CET1 capital, 10.1% CET1 capital 742 732 for T1 capital and 12.6% for total capital) Additional Tier 1 capital 0 0 ► Profits for the ye
Slide 26: Development of CET1 capital ratio (fully loaded)
Development of CET1 capital ratio (fully loaded) Leverage ratio Leverage ratio 10.8% 10.3% ProCredit Group | Q2 2020 results | Frankfurt am Main, 13 August 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 | Q2 2020 results | Frankfurt am Main, 13 August 2020 26
Slide 28: Q&A
Q&A ProCredit Bank Georgia ProCredit Group | Q2 2020 results | Frankfurt am Main, 13 August 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 | Q2 2020 results | Frankfurt am Main, 13 August 2020 28
Slide 30: ProCredit – A unique approach to banking
ProCredit – A unique approach to banking Summary Key figures Q2 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 6,805m EUR 5,052m 88% ► Headquarte
Slide 31: Overview of quarterly financial development
Overview of quarterly financial development In EUR m Q2-2019 Q3-2019 Q4-2019 Q1-2020 Q2-2020 Net interest income 47.3 51.0 50.9 50.9 49.0 Provision expenses 2.0 -1.7 -5.7 6.9 8.8 Net fee and commission income 13.1 13.1 13.1 12.0 10.6 Net result of other operating income -1.3 2.4 0.7 1.8 0.3 Operatin
Slide 32: Segment South Eastern Europe
Segment South Eastern Europe Regional loan portfolio breakdown Key financial data Bosnia (in EUR m) H1 2019 H1 2020 Albania 6% 6% Net interest income 54.4 56.0 Bulgaria Romania 28% Provision expenses 3.0 7.6 9% Net fee and commission income 18.1 15.7 Net result of other operating income -2.3 -0.7 No
Slide 33: Segment Eastern Europe
Segment Eastern Europe Regional loan portfolio breakdown Key financial data Moldova (in EUR m) H1 2019 H1 2020 13% Net interest income 30.2 32.4 Provision expenses 1.8 6.3 Net fee and commission income 4.7 4.2 Net result of other operating income 2.0 3.2 Operating income 35.0 33.5 Georgia Ukraine 56
Slide 34: Segment South America
Segment South America Regional loan portfolio breakdown Key financial data (in EUR m) H1 2019 H1 2020 Net interest income 7.8 9.3 Provision expenses -0.7 1.4 Net fee and commission income -0.1 -0.2 Net result of other operating income -0.4 -0.2 Ecuador 100% Operating income 7.9 7.5 Operating expense
Slide 35: Development of green loan portfolio
Development of green loan portfolio Green loan portfolio growth ► The ProCredit banks are following their Annual 9.1% 12.6% 15.4% 16.6% 17.3% Environmental Plans without major changes, with green 874 loan portfolio projections remaining largely unchanged 795 17 17 678 ► During Q2-20, the green loan
Slide 36: Structure of the loan portfolio (continued)
Structure of the loan portfolio (continued) Loan portfolio by exposure Loan portfolio by currency 8% 31% 34% 20% 55% 14% 11% 27% EUR USD Other currencies < 50k 50-250k 250-500k 500k-1.5m >1.5m 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 5% 1% 2% ► Highly diversified funding structure and counterparties 4% ► Customer deposits main funding source, accounting for 74%, Customer deposits supplemented by long-term funding from IFIs and 14% Liabilities to IFIs institutional investors Liabilities
Slide 38: Balance sheet
Balance sheet in EUR m Jun-20 Dec-19 Assets Cash and central bank balances 1,069 1,082 Loans and advances to banks 197 321 Investment securities 370 378 Loans and advances to customers 5,052 4,797 Loss allowance for loans to customers -116 -106 Derivative financial assets 1 0 Property, plant and equ
Slide 39: Income statement by segment
Income statement by segment 01.01.- 31.06.2020 South Eastern Germany Eastern Europe South America Consolidation Group (in EUR m) Europe Interest and similar income 11.8 65.8 71.1 15.7 -10.8 153.6 of which inter-segment 10.8 0.1 -0.1 0.0 0.0 0.0 Interest and similar expenses 10.7 33.4 15.1 6.4 -11.9
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 Equity Forum 02. - 03.09.2020 Frankfurt/Main Investor Relations Team German Fall Conference 2020 GBC/Scherrer Asset Manag
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