Slide 1: Q2 2023 results
Hubert Spechtenhauser, Chairman of the Management Board Christian Dagrosa, CFO and member of the Management Board Q2 2023 results Frankfurt am Main, August 2023 (updated as of 14th February 2024)
Slide 2: Agenda
A. Highlights and business update B. Group results C. Regional performance D. Outlook ProCredit Group | Q2 2023 results | Frankfurt am Main, 14 August 2023 1
Slide 3: Highlights H1 2023
Highlights H1 2023 ProCredit group achieves best H1 result since listing Strong half year result with 14.2% return on equity, underlining the group’s earnings potential and medium-term ambitions 14.2% ► Profit of EUR 64.1m mainly due to positive margin development and strong credit risk performance
Slide 4: Customer loan portfolio on stable level
Customer loan portfolio on stable level Loan portfolio growth ► Customer loans increase by EUR 48m or 0.8% since beginning -2.2% yoy (0.3% FX-adj) of the year 0.8% ytd (1.0% FX-adj) 6,294 ▪ Good growth in Q2 of EUR 95m or 1.6% indicative for 5,924 6,108 6,156 gradually improving investment environme
Slide 5: Good deposit development through digital banking channels
Good deposit development through digital banking channels Deposit growth ► Strong yoy increase of EUR 716m or 12.5% +12.5% yoy (14.6% FX-adj) +2.7% ytd (+2.8% FX-adj) ▪ Good contribution from private individual client deposits to overall growth of approx. 40% 6,290 6,458 5,542 5,742 1,872 2,149 ▪ Gr
Slide 6: Opening of ProEnergy solar park located in Kosovo
Opening of ProEnergy solar park located in Kosovo Milestone in achieving group climate neutrality Opening of group-owned PV park, located in Kosovo Consistent progress towards group climate neutrality… ✓ Mid-term group target of climate neutrality announced (2018) 3 MWp 450 c. 90% production via equ
Slide 7: Conversion of legal form into stock corporation (AG)
Conversion of legal form into stock corporation (AG) Update based on successful resolution at 2023 AGM Strong project execution on earliest possible timeline Strategic rationale ✓ Conversion embedded in the ongoing 14-Oct 2022 April 2023 05-Jun-23 Within 2023 strengthening of the corporate structure
Slide 8: Agenda
A. Highlights and business update B. Group results C. Regional performance D. Outlook ProCredit Group | Q2 2023 results | Frankfurt am Main, 14 August 2023 7
Slide 9: Operating income and expense overview
Operating income and expense overview 14.5 13.7Operating income 14.0 14.0 12.6 1.3 ► Strong increase in operating income yoy by approx. 20%, to 1.2 1.2 1.1 1.3 EUR 191.8m in H1-23 191.8 160.2 98.0 ▪ Continued positive dynamics in net interest (up 25% yoy) 82.5 12.5 12.8 13.2 12.8 and net fee income
Slide 10: Net interest income
Net interest income 3.3% 3.4% 3.1% 3.2% Quarterly development 2.9% ► Q2-23 NII increased by EUR 4.8m or 6.4% vs. Q1-23 to EUR 3.4% 3.6% 80.2m 3.3% 72.6 75.4 3.1% 3.2% 64.7 67.2 14.5 13.7 14.0 80.211.9 14.0 60.2 12.6 75.4 ▪ Continued positive NIM dynamics with additional NIM 12.6 72.6 9.5 1.3 11.967.
Slide 11: Net fee and commission income
70.0 60.0 Net fee and commission income 50.0 40.0 Quarterly development 14.5 ► Q2-23 net fee and commission income on strong level of 14.9m 13.7 14.0 14.0 12.6 14.5 14.9 30.0 13.7 14.0 1.2 14.0 1.3 1.1 1.2 1.3 1.3 1.1 1.2 ▪ Increase qoq of EUR 0.9m or 6.4% mainly driven by 1.2 1.2 (in EUR m) payment
Slide 12: Personnel and administrative expenses
Personnel and administrative expenses Quarterly development 72.6% 72.6% ► Q2-23 cost-income ratio on good level of below 60% 61.0% 61.0% 72.6% 61.9% 61.9% 59.7% 59.7% 59.1% 59.1% 14.0 14.5 14.0 13.7 61.0%12.6 61.9% 59.7% 1.2 1.3 59.7% 1.1 ▪ Increase in 57.0% personnel and administrative costs qoq of
Slide 13: Loss allowance
.0 70 .0 60 .0 50 Loss allowance .0 35.6 40 35.6 Quarterly development 14.0 14.5 14.0 ► Q2-23 loss allowance on continued low level due to steady .0 141 bps 12.6 139 bps 13.7 164 bps 30 25.4 12 bps -9 bps portfolio indicators; 25.4 net release of provisions of EUR 1.3m 1.2 1.3 1.121.8 21.7 1.2 21.8
Slide 14: Loan portfolio quality
Loan portfolio quality Loan portfolio by geography Net-write offs (annualised) Ecuador Germany 0.1% 0.1% 0.2% 0.2% 0.1% 1% Moldova 8% Bulgaria 3% 24% Georgia 6% Ukraine Stage 2 9% 7.3% 7.5% 7.3% 7.0% 7.5% Albania 5.5% Serbia 4.6% 4.5% 4% 3.3% 3.7% Bosnia & 15% Herzegovina 5% Romania 6% North Kosovo
Slide 15: Regulatory capital, risk-weighted assets, capital ratios
Regulatory capital, risk-weighted assets, capital ratios Capitalisation overview ► CET1 ratio increased to 14.2%, up 68 ppt from Dec-22 in EUR m Dec-22 Jun-23 CET1 capital 820 836 ▪ Increase in CET1 capital mainly driven by attribution of Additional Tier 1 capital 0 0 previous year profit Tier 1 cap
Slide 16: Agenda
A. Highlights and business update B. Group results C. Regional performance D. Outlook ProCredit Group | Q2 2023 results | Frankfurt am Main, 14 August 2023 15
Slide 17: Contribution of regional segments to group net income
Contribution of regional 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, PCB Germany (EUR 55m loan portfolio; EUR 251m deposits) (H1-23, i
Slide 18: Segment South Eastern Europe
Segment South Eastern Europe Segment key financials SEE Individual bank development (H1-23) Operating income (€m) Cost-income ratio Country Profit after tax (€m) Cost-income Return on ratio equity +29% -2.4pp 121.3 57.0% Bulgaria 12.0 49% 11% 54.6% 93.7 Kosovo 11.7 48% 23% H1-22 H1-23 H1-22 H1-23 Se
Slide 19: Segment Eastern Europe
Segment Eastern Europe Segment key financials EE Individual bank development (H1-23) Operating income (€m) Cost-income ratio Country Profit after tax (€m) Cost-income Return on +21% ratio equity -1.8pp +10% 145.6 52.7% 52.6% Ukraine 12.4 32.9% 33.4% 52.2 120.3 47.5 50.0 45.8% 20.0 44.0% 26.7 22.5 Ge
Slide 20: Update on ProCredit Bank Ukraine
Update on ProCredit Bank Ukraine Current status of operations Regional risk classification ► Safety of staff: Out of 318 staff (329 at the start of the year), 10 are mobilized ► Banking operations basically uninterrupted since beginning of the war: Bank’s operationality secured through uninterrupted
Slide 21: Agenda
A. Highlights and business update B. Group results C. Regional performance D. Outlook ProCredit Group | Q2 2023 results | Frankfurt am Main, 14 August 2023 20
Slide 22: Outlook FY 2023
Outlook FY 2023 RoE and CIR outlook raised on 30 May 2023 FY 2023 outlook for ProCredit group Medium single digit percentage growth ► Growth of the loan portfolio (FX adjusted) 8.0 – 10.0% (based on up to 45bps cost of risk) ► Return on equity (RoE) Previous: 6.0 – 8.0% (based on up to 70bps cost of
Slide 23: Medium-term outlook
Medium-term outlook 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-off effects) ► Green loan portfolio
Slide 24: Q&A
Q&A Photovoltaic project financed by ProCredit Bulgaria
Slide 25: Appendix
Appendix A. Impact reporting B. P&L and balance sheet C. Loan portfolio D. Information on segment and bank level E. Capital, liquidity and other information ProCredit Group | Q2 2023 results | Frankfurt am Main, 14 August 2023 24
Slide 26: 2022 sustainability highlights and developments
2022 sustainability highlights and developments Preferred partner for Enhanced trainings LATEST ACHIEVEMENTS thematic on E&S topics external events Developing Introduction of tools to facilitate Target achieved: Promoting and animal welfare Member of the NZBA ESG impacts and communicating E&S assess
Slide 27: Sustainability commitment firmly integrated in the business model
Sustainability commitment firmly integrated in the business model – Impact report 2022 Impact through Environmental Comprehensive staff business responsibility development ► Supporting SMEs through the cycle ► Green loan portfolio > €1.2bn, avg. ► High diversity, gender parity growth 16% p.a. since
Slide 28: Appendix
Appendix A. Impact reporting B. P&L and balance sheet C. Loan portfolio D. Information on segment and bank level E. Capital, liquidity and other information ProCredit Group | Q2 2023 results | Frankfurt am Main, 14 August 2023 27
Slide 29: H1 2023 results at a glance
H1 2023 results at a glance In EUR m Q2-22 Q2-23 H1-22 H1-23 Y-o-Y Net interest income 64.7 80.2 124.8 155.7 30.9 Net fee and commission income 13.7 14.9 26.3 28.9 2.6 Other operating income (net) 4.2 2.9 9.1 7.2 -1.9 Operating income 82.5 98.0 160.2 191.8 31.6 Income Personnel expenses 23.6 28.8 47
Slide 30: Overview of quarterly financial development
Overview of quarterly financial development In EUR m Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Net interest income 64.7 67.2 72.6 75.4 80.2 Net fee and commission income 13.7 14.0 14.5 14.0 14.9 Other operating income (net) 4.2 5.2 6.2 4.3 2.9 Operating income 82.5 86.4 93.2 93.7 98.0 Income statement Personnel
Slide 31: Balance sheet
Balance sheet In EUR m Dec-22 Jun-23 Assets Cash and central bank balances 1,940 1,916 Loans and advances to banks 280 337 Investment securities 480 568 Loans and advances to customers 6,108 6,156 Loss allowance for loans to customers -215 -212 Derivative financial assets 13 12 Property, plant and e
Slide 32: Asset reconciliation
Asset reconciliation 13% Other assets Cash and cash 21% equivalents 14.0 14.5 14.0 13.7 Net loans to 12.6 1.3 66% 1.2 1.2 1.1 customers 1.3 12.5 12.8 13.2 12.8 11.4 (in EUR m) Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 ProCredit Group | Q2 2023 results | Frankfurt am Main, 14 August 2023 31
Slide 33: Liabilities and equity reconciliation
Liabilities and equity reconciliation Liabilities to banks 14% 72% Liabilities to customers (in EUR m) 1% 2% Other liabilities 10% Equity ProCredit Group | Q2 2023 results | Frankfurt am Main, 14 August 2023 32
Slide 34: Appendix
Appendix A. Impact reporting B. P&L and balance sheet C. Loan portfolio D. Information on segment and bank level E. Capital, liquidity and other information ProCredit Group | Q2 2023 results | Frankfurt am Main, 14 August 2023 33
Slide 35: Structure of the loan portfolio by exposure and currency
Structure of the loan portfolio by exposure and currency Loan portfolio by exposure Loan portfolio by currency 7% 32% 19% 35% 53% 15% 12% 27% < 50k 50-250k 250-500k 500k-1.5m >1.5m EUR USD Other Currencies ProCredit Group | Q2 2023 results | Frankfurt am Main, 14 August 2023 34
Slide 36: Development of green loan portfolio
Development of green loan portfolio Green loan portfolio growth ► Green loan portfolio amounting to EUR 1.2bn, representing 20.1% of total loan portfolio 15.4% 16.6% 18.7% 19.0% 20.2% 20.1% ► Includes financing of investments in: 1,231 1,239 1,128 54 60 985 36 • Energy efficiency 795 21 678 17 • Ren
Slide 37: Structure of collateral
Structure of collateral Collateral by type (FY 2022) ► Majority of collateral consists of mortgages ► Growing share of financial guarantees mainly as a result of 2% InnovFin and other guarantee programmes provided by the 16% European Investment Fund ► Clear, strict requirements for types of acceptab
Slide 38: Appendix
Appendix A. Impact reporting B. P&L and balance sheet C. Loan portfolio D. Information on segment and bank level E. Capital, liquidity and other information ProCredit Group | Q2 2023 results | Frankfurt am Main, 14 August 2023 37
Slide 39: Income statement by segment
Income statement by segment South Eastern 01.01.- 30.06.2023 (in EUR m) Germany Eastern Europe South America Consolidation Group Europe Interest and similar income 23.9 83.2 132.2 24.2 -19.4 244.0 of which inter-segment 12.3 3.2 2.3 0.0 0.0 0.0 Interest and similar expenses 22.7 38.3 32.7 14.1 -19.4
Slide 40: Segment South Eastern Europe
Segment South Eastern Europe Regional loan portfolio breakdown Key financial data Albania Bosnia & 6% (in EUR m) H1-22 H1-23 Herzeg. 6% Romania Bulgaria Net interest income 71.6 99.5 8% 33% Net fee and commission income 16.8 18.4 North Other operating income (net) 5.3 3.4 Macedonia 11% Operating inc
Slide 41: Segment Eastern Europe
Segment Eastern Europe Regional loan portfolio breakdown Key financial data Moldova 15% (in EUR m) H1-22 H1-23 Net interest income 40.2 44.9 Net fee and commission income 3.4 3.5 Ukraine Other operating income (net) 3.9 3.8 49% Operating income 47.5 52.2 Georgia Personnel expenses 8.5 8.9 36% Admini
Slide 42: Segment South America
Segment South America Regional loan portfolio breakdown Key financial data (in EUR m) H1-22 H1-23 Net interest income 12.4 10.0 Net fee and commission income -0.1 0.1 Other operating income (net) -0.7 -0.3 Operating income 11.6 9.8 Personnel expenses 3.2 4.1 Admininistrative expenses 6.0 5.9 Ecuador
Slide 43: Key figures per ProCredit bank (as per H1 2023)
Key figures per ProCredit bank (as per H1 2023) North Bosnia & Country Bulgaria Serbia Kosovo Romania Macedonia Herzegovina Customer loan portfolio (EUR m) 1,466 908 702 484 372 294 Change in customer loan portfolio (%) 2.4% -2.2% 4.0% 2.2% 6.1% 3.0% Credit impaired loans (Stage 3) 0.7% 2.8% 1.7% 1.
Slide 44: Appendix
Appendix A. Impact reporting B. P&L and balance sheet C. Loan portfolio D. Information on segment and bank level E. Capital, liquidity and other information ProCredit Group | Q2 2023 results | Frankfurt am Main, 14 August 2023 43
Slide 45: Strategic group positioning on SEE/EE, with positive expected GDP development
Strategic group positioning on SEE/EE, with positive expected GDP development and increased international focus on the region GDP outlook for SEE/EE remains intact, Euro area lower Macroeconomic environment / key current themes SEE/EE, excl. Ukraine(1) Euro area • 2023 median GDP growth in SEE/EE es
Slide 46: Funding, rating and liquidity
Funding, rating and liquidity Funding sources Deposit-to-loan ratio development Rating 2%2% 1% 15% BBB (stable) Customer deposits 103% 105% ProCredit Holding rating Liabilities to banks by Fitch, last affirmed on Debt securities 23 June 2023 Subordinated debt Other liabilities 80% Dec-22 Jun-23 Tota
Slide 47: Explanatory note on performance indicators and ratios
Explanatory note on performance indicators and ratios The ProCredit group uses an integrated system of indicators to monitor ▪ The share of credit-impaired loans(7) is the most significant indicator to and manage the implementation and further development of the group’s assess portfolio quality busi
Slide 48: Contact Investor Relations
Contact Investor Relations Financial calendar (continuously updated on IR Website) Date Location Event information 04.09. – 05.09.2023 Frankfurt/ Main Equity Forum, Fall Conference 2023 14.11.2023 Quarterly Financial Report as of 30 September 2023, 16:00 CET Analyst Call 27.11. – 29.11.2023 Frankfur
Slide 49: Disclaimer
Disclaimer The material in this presentation and further supporting documents have been This presentation and further supporting documents may contain forward- prepared by ProCredit Holding AG & Co. KGaA, Frankfurt am Main, Federal looking statements including statements regarding our intent, belief