Procredit Holding Ag · XETR:PCZ
Procredit — Q3 2023 Earnings Presentation
49 slides from Procredit's earnings presentation, Nov 14, 2023
Slide 1: Q3 2023 results
Hubert Spechtenhauser, Chairman of the Management Board Christian Dagrosa, CFO and member of the Management Board Q3 2023 results Frankfurt am Main, November 2023 (updated as of 14 th February 2024)
Slide 2: Highlights and business update; Group results; Regional performance; Outlook
A. Highlights and business update B. Group results C. Regional performance D. Outlook ProCredit Group | Q3 2023 results | Frankfurt am Main, 14 November 2023 1
Slide 3: Highlights 9M 2023
Highlights 9M 2023 ProCredit group well on track to achieve raised RoE guidance for 2023 Strong 9M result with 13.6% return on equity; all group banks in SEE/EE with enhanced operational and financial performance 13.6% ► Profit of EUR 94.0m achieved in 9M-23, corresponding to the highest 9M result o
Slide 4: Good growth in customer loans, particularly in Q2 and Q3
Good growth in customer loans, particularly in Q2 and Q3 Loan portfolio growth ► Customer loans increase by EUR 119m or 1.9% since beginning -1.0% yoy of the year +1.9% ytd 6,292 6,156 6,226 ▪ Good growth in Q2 and Q3 of EUR 165m or 2.7% indicative 6,108 for gradually improving investment environmen
Slide 5: Strong deposit development through digital banking channels
Strong deposit development through digital banking channels Deposit growth ► Customer deposits increase by a strong 649m or 10.3% since +15.9% yoy beginning of the year +10.3% ytd 6,938 ▪ Growth driven by both private individual and SME clients and 6,290 6,458 well diversified across banks, showing
Slide 6: Strategic group positioning on SEE/EE, positive expected GDP development
Strategic group positioning on SEE/EE, positive expected GDP development in line with robust performance of group ’s SME clients GDP outlook for SEE/EE remains intact, well above Euro area Macroeconomic environment / key current themes SEE/EE, incl. Ukraine(1) Euro area • 2024 median GDP growth in S
Slide 7: Group results
A. Highlights and business update B. Group results C. Regional performance D. Outlook ProCredit Group | Q3 2023 results | Frankfurt am Main, 14 November 2023 6
Slide 8: 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 22%, to EUR 301m 1.2 1.2 1.1 1.3 in 9M-23 301.2 109.4 246.6 ▪ Continued positive dynamics in net interest (up 27% yoy) 86.4 12.5 12.8 13.2 12.8 and net fee income (up 7% yo
Slide 9: Net interest income
Net interest income 3.3% 3.4% 3.1% 3.2% Quarterly development 2.9% 3.9% ► Qoq, NII increased by EUR 8.8m or 11.0% vs. Q2-23 to 3.6% EUR 89.0m 3.3% 3.4% 75.4 3.2% 72.6 89.0 64.7 67.2 14.5 13.7 14.0 80.2 11.9 14.0 60.2 75.4 12.6 15.4 ▪ Continued positive NIM dynamics with additional NIM 12.6 72.6 9.5
Slide 10: Net fee and commission income
70.0 60.0 Net fee and commission income 50.0 40.0 Quarterly development 14.5 ► Q3-23 net fee and commission income on good level of 14.4m 14.0 14.0 12.6 14.0 14.513.7 14.0 14.9 14.4 30.0 1.2 1.3 1.1 1.2 1.2 1.2 1.3 1.3 1.1 1.2 ▪ Seasonal decrease qoq of EUR 0.5m or 3.7% mainly driven (in EUR m) by p
Slide 11: Personnel and administrative expenses
Personnel and administrative expenses Quarterly development 72.6% 72.6% 72.6% ► Q3-23 cost-income ratio further reduced to 57.1% 61.0% 61.0% 61.9% 61.9% 59.7% 59.7% 59.1% 59.1% 14.0 59.7% 14.5 14.0 61.9% 13.7 59.7% 12.6 1.3 57.1% 1.2 1.2 57.4% 1.1 ▪ Increase in 57.0% 57.0% personnel and administrati
Slide 12: Loss allowance
.0 70 .0 60 .0 50 Loss allowance .0 35.6 40 35.6 Quarterly development 14.0 14.5 14.0 ► Q3-23 loss allowance of EUR 8.5m, resulting in YTD loss .0 139 bps 12.6 164 bps 13.7 12 bps 30 25.4 -9 bps 55 bps allowance of25.4 EUR 9.0m or 20 bps cost of risk 1.2 1.3 1.121.8 21.7 1.2 21.8 21.7 (in EUR m) (in
Slide 13: Loan portfolio quality
Loan portfolio quality Loan portfolio by geography Net-write offs (annualised) Ecuador Germany 0.1% 0.2% 0.2% 0.1% 0.4% 1% Moldova 8% Bulgaria 3% Georgia 24% 6% Ukraine Stage 2 9% 8.8% 7.5% 7.3% 7.0% 7.5% Albania 5.5% 5.9% 4% Serbia 4.6% 4.5% 3.7% Bosnia & 15% Herzegovina 5% Romania 6% Kosovo North
Slide 14: Regulatory capital, risk-weighted assets, capital ratios
Regulatory capital, risk-weighted assets, capital ratios Capitalisation overview ► CET1 ratio increased to 14.9%, up 1.4 pp from Dec-22 in EUR m Dec-22 Sep-23 CET1 capital 820 907 ▪ Capital ratios well above regulatory capital requirements of Additional Tier 1 capital 0 0 9.2% CET1, 11.4% Tier 1, 14
Slide 15: Regional performance
A. Highlights and business update B. Group results C. Regional performance D. Outlook ProCredit Group | Q3 2023 results | Frankfurt am Main, 14 November 2023 14
Slide 16: 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 48m loan portfolio; EUR 287m deposits) (9M-23, i
Slide 17: Segment South Eastern Europe
Segment South Eastern Europe Segment key financials SEE Individual bank development (9M-23) Operating income (€m) Cost-income ratio Country Profit after tax (€m) Cost-income Return on ratio equity +32% +32% -3.4pp -3.4pp 56.4% 56.4% Bulgaria 21.9 47.1% 13.4% 192.6 192.6 53.0% 53.0% 145.7 145.7 Kosov
Slide 18: Segment Eastern Europe
Segment Eastern Europe Segment key financials EE Individual bank development (9M-23) Operating income (€m) Cost-income ratio Country Profit after tax (€m) Cost-income Return on +21% ratio equity +13% -2.6pp 80.9 145.6 Ukraine 16.4 32.9% 33.4% 71.5 120.3 53.9% 51.0% 50.0 45.8% 20.0 43.2% 36.3 39.5 Ge
Slide 19: Update on ProCredit Bank Ukraine
Update on ProCredit Bank Ukraine Current status of operations Regional risk classification ► Safety of staff: Out of 332 staff, 10 are mobilized ► Banking operations continue uninterrupted – as they have since beginning of the war ► Bank is increasing capacity, with staff numbers up by 8% since begi
Slide 20: Outlook
A. Highlights and business update B. Group results C. Regional performance D. Outlook ProCredit Group | Q3 2023 results | Frankfurt am Main, 14 November 2023 19
Slide 21: Outlook FY 2023
Outlook FY 2023 RoE and CIR outlook raised on 26 October 2023 FY 2023 outlook for ProCredit group Lower to medium single digit percentage growth ► Growth of the loan portfolio Previous: Medium single digit percentage growth (FX adjusted) Around 12% (with margin of +/- 1 ppt, based on up to 30bps cos
Slide 22: 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 23: Q&A
Q&A Photovoltaic project financed by ProCredit Bulgaria
Slide 24: 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 | Q3 2023 results | Frankfurt am Main, 14 November 2023 23
Slide 25: 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 26: 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 27: 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 28: Conversion of legal form into stock corporation (AG)
Conversion of legal form into stock corporation (AG) Successful completion in September 2023 Strong project execution on earliest possible timeline Strategic rationale ✓ Conversion embedded in the ongoing 14-Oct 2022 April 2023 05-Jun-23 27-Sep-23 strengthening of the corporate structure and capital
Slide 29: Continuous efforts to reduce our direct environmental footprint
Continuous efforts to reduce our direct environmental footprint ProCredit Bank headquarter first EDGE certified building in Ukraine EDGE certification in 2023 of headquarter of PCB Ukraine Consistent reduction of our direct environmental footprint… Savings calculated based on local 52% 45% 84 tons ✓
Slide 30: 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 | Q3 2023 results | Frankfurt am Main, 14 November 2023 29
Slide 31: 9M 2023 results at a glance
9M 2023 results at a glance In EUR m Q3-22 Q3-23 9M-22 9M-23 Y-o-Y Net interest income 67.2 89.0 192.1 244.7 52.6 Net fee and commission income 14.0 14.4 40.2 43.2 3.0 Other operating income (net) 5.2 6.0 14.3 13.2 -1.1 Operating income 86.4 109.4 246.6 301.2 54.5 Income Personnel expenses 25.6 31.4
Slide 32: Overview of quarterly financial development
Overview of quarterly financial development In EUR m Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Net interest income 67.2 72.6 75.4 80.2 89.0 Net fee and commission income 14.0 14.5 14.0 14.9 14.4 Other operating income (net) 5.2 6.2 4.3 2.9 6.0 Operating income 86.4 93.2 93.7 98.0 109.4 Income Personnel expenses
Slide 33: Balance sheet
Balance sheet in EUR m Dec-22 Sep-23 Assets Cash and central bank balances 1,940 2,138 Loans and advances to banks 280 369 Investment securities 480 723 Loans and advances to customers 6,108 6,226 Loss allowance for loans to customers -215 -210 Derivative financial assets 13 13 Property, plant and e
Slide 34: Balance sheet development
Balance sheet development YTD asset development YTD liabilities and equity development (in EUR m) (in EUR m) ► Simple balance sheet structure with 63% of assets net loans to ► Liabilities and equity structure with 73% liabilities to customers, customers, 23% cash and cash equivalents and 14% other a
Slide 35: 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 | Q3 2023 results | Frankfurt am Main, 14 November 2023 34
Slide 36: 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% 20% 36% 52% 15% 12% 26% < 50k 50-250k 250-500k 500k-1.5m >1.5m EUR USD Other Currencies ProCredit Group | Q3 2023 results | Frankfurt am Main, 14 November 2023 35
Slide 37: Development of green loan portfolio
Development of green loan portfolio Green loan portfolio growth ► Green loan portfolio amounting to EUR 1.3bn, representing 20.2% of total loan portfolio 15.4% 16.6% 18.7% 19.0% 20.2% 20.2% ► Includes financing of investments in: 1,231 1,257 1,128 54 64 985 36 • Energy efficiency 795 21 678 17 • Ren
Slide 38: 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 39: 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 | Q3 2023 results | Frankfurt am Main, 14 November 2023 38
Slide 40: Income statement by segment
Income statement by segment South Eastern 01.01.- 30.09.2023 (in EUR m) Germany Eastern Europe South America Consolidation Group Europe Interest and similar income 38.4 128.8 210.2 37.3 -30.5 384.3 of which inter-segment 19.9 5.2 5.3 0.0 0.0 0.0 Interest and similar expenses 36.1 59.3 52.3 22.4 -30.
Slide 41: Segment South Eastern Europe
Segment South Eastern Europe Regional loan portfolio breakdown Key financial data Albania Bosnia & 6% (in EUR m) 9M-22 9M-23 Herzeg. 6% Romania Bulgaria Net interest income 111.6 157.9 8% 33% Net fee and commission income 25.8 27.6 North Other operating income (net) 8.3 7.0 Macedonia 11% Operating i
Slide 42: Segment Eastern Europe
Segment Eastern Europe Regional loan portfolio breakdown Key financial data Moldova 15% (in EUR m) 9M-22 9M-23 Net interest income 59.9 69.6 Net fee and commission income 5.0 5.2 Ukraine Other operating income (net) 6.6 6.1 49% Operating income 71.5 80.9 Georgia Personnel expenses 12.3 13.6 36% Admi
Slide 43: Segment South America
Segment South America Regional loan portfolio breakdown Key financial data (in EUR m) 9M-22 9M-23 Net interest income 19.3 14.8 Net fee and commission income 0.0 0.1 Other operating income (net) -1.6 -0.7 Operating income 17.7 14.2 Personnel expenses 5.2 6.0 Admininistrative expenses 8.9 8.7 Ecuador
Slide 44: Key figures per ProCredit bank (as per 9M 2023)
Key figures per ProCredit bank (as per 9M 2023) North Bosnia & Country Bulgaria Serbia Kosovo Romania Macedonia Herzegovina Customer loan portfolio (EUR m) 1,484 913 720 498 380 292 Change in customer loan portfolio (%) 3.7% -1.7% 6.6% 5.0% 8.4% 2.4% Credit impaired loans (Stage 3) 0.8% 3.1% 1.5% 1.
Slide 45: 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 | Q3 2023 results | Frankfurt am Main, 14 November 2023 44
Slide 46: Funding, rating and liquidity
Funding, rating and liquidity Funding sources Deposit-to-loan ratio development Rating 2%1% 1% 14% Customer deposits 111% BBB (stable) 103% ProCredit Holding rating Liabilities to banks by Fitch, last affirmed on Debt securities 23 June 2023 Subordinated debt Other liabilities 82% Dec-22 Sep-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 and ▪ The credit-impaired coverage ratio(8) gives insights into loss allowances for manage the implementation and further development of the group’s business credit-impaired l
Slide 48: Contact Investor Relations
Contact Investor Relations Financial calendar (continuously updated on IR Website) Date Location Event information 27.11. – 29.11.2023 Frankfurt/ Main Deutsche Börse, Deutsches Eigenkapitalforum 2023 20.03.2024 Annual Report 2023 21.03.2024 Capital Markets Day 2024 13.05.2024 Quarterly Financial Rep
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, Frankfurt am Main, Federal Republic of looking statements including statements regarding our intent, belie