Procredit Holding Ag · XETR:PCZ
Procredit — Q3 2019 Earnings Presentation
39 slides from Procredit's earnings presentation, Nov 13, 2019
Slide 1: Q3 2019 results
Dr Gabriel Schor, Member of the Management Board Christian Dagrosa, Controlling and Investor Relations Q3 2019 results Frankfurt am Main, 13 November 2019
Slide 2: ProCredit – A unique approach to banking
ProCredit – A unique approach to banking Summary Key figures 9M 2019 and FY 2018 ► A profitable, development-oriented commercial group of banks for Total assets Customer loan portfolio Deposits/loans(1) SMEs with a focus on South Eastern Europe and Eastern Europe EUR 6,551m EUR 4,710m 88% ► Headquar
Slide 3: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q3 2019 results | Frankfurt am Main, 13 November 2019 2
Slide 4: Highlights
Highlights Continued good business growth with target SMEs ► 3.3% growth in customer loans (8.3% ytd) only minor reduction of very small loans confirming end of transition phase • ► Continuously high portfolio quality • Reduction of default portfolio to 2.7% and improved coverage to almost 93% Posit
Slide 5: Solid volume growth in loan portfolio
Solid volume growth in loan portfolio 9M 2019 FY 2018 Note: Gross Loan volume growth split by initial loan size in all segments; (*) Gross Loan portfolio without ARDEC and Colombia ProCredit Group | Q3 2019 results | Frankfurt am Main, 13 November 2019 4
Slide 6: Development of green loan portfolio
Development of green loan portfolio Green loan portfolio growth 9.1% 12.6% 15.4% 15.9% ► Strong growth in the green loan portfolio of 4.9% in Q3 19 747 678 17 15 ► Includes financing of investments in 489 • Energy efficiency 14 331 • Renewable energies 730 15 662 (in EUR m) 475 • Other environmental
Slide 7: Strong deposit growth through digital banking channels
Strong deposit growth through digital banking channels Deposits by type of client ► Strong growth in deposit volume in Q3 and ytd 4,143 • 7.5% growth in deposits in Q3 (9.1% ytd) 3,795 3,769 3,859 • achieved through growth in business and private 2,177 client deposits 1,915 1,887 1,963 ► Introductio
Slide 8: 9M 2019 results versus guidance
9M 2019 results versus guidance Guidance Actuals 2019 9M 2019 ► Growth of the loan portfolio 10 – 13%(1) 8.3% ► Profit for the period EUR 48 – 55m EUR 44.0m ► Cost-income ratio (CIR) < 70% 68.4% ► CET1 ratio > 13% 14.3% ► Dividend payout ratio 1/3 of profits 1/3 of profits In the medium term, assumi
Slide 9: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q3 2019 results | Frankfurt am Main, 13 November 2019 8
Slide 10: Q3 2019 results at a glance
Q3 2019 results at a glance In EUR m Q3-2018 Q3-2019 9M-2018 9M-2019 y-o-y Net interest income 47.2 51.0 139.3 143.6 4.3 Provision expenses -0.1 -1.7 -0.2 2.4 2.6 Net fee and commission income 13.3 13.1 37.3 38.9 1.5 Net result of other operating income 1.3 2.4 1.1 2.0 0.9 Operating income 61.9 68.1
Slide 11: Net interest income
Net interest income ► Strong q-o-q and y-o-y increase in net interest income on the back of solid portfolio growth and growing interest 3.3% 3.2% income 3.2% 3.1% 3.1% ► Interest income and interest expenses currently impacted by excess liquidity driven by strong deposit growth in Q3 51.0 47.2 46.9
Slide 12: Provisioning expenses
Provisioning expenses 19 bps 18 bps ► Q3 net release on the back of further improvement of portfolio quality ► Q-o-q reduction in underperforming loan portfolio -1 bps 2.1 2.0 ► Credit impaired loans reduced by 40bp to 2.7% -1.7 -0.1 -4.5 ► Coverage ratio increased by almost 2pp to 93% -15 bps ► Ove
Slide 13: Net fee and commission income
Net fee and commission income ► Introduction of ProCredit Direct led to an increase in fee income in 2018 14.8 13.3 12.7 13.1 13.1 ► Net fee income now levelling at around EUR 13m ► Fee income from business clients developing positively on the back of growing base of SME clients ► Decreasing income
Slide 14: Operating expenses
Operating expenses ► Q-o-q, operating expenses largely stable 71.4% 69.8% 71.6% 67.3% 64.2% ► Reduction in administrative expenses largely offsetting increased personnel expenses driven by annual salary review 20.3 19.6 20.3 ► Cost-income-ratio developing positively on the back of 19.9 19.1 higher o
Slide 15: 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 Includes above all anticipated management, training and development losses from the disposal of PCB Colombia (excl. effects from Includes ProCredit Holding, Quipu, ProCred
Slide 16: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q3 2019 results | Frankfurt am Main, 13 November 2019 15
Slide 17: Structure of the loan portfolio
Structure of the loan portfolio Loan portfolio by geographical segments Loan portfolio by sector South America: Germany: 6% 1% Private loans: Business loans: 1% 1% 93% 6% 6% Eastern Europe: 3% 19% South Eastern 23% Europe: 7% 70% 27% 17% 13% 5% 17% 5% 4% 21% 6% 11% 23% 8% Bulgaria Serbia Kosovo Nort
Slide 18: Structure of the loan portfolio (continued)
Structure of the loan portfolio (continued) Loan portfolio by initial loan size Loan portfolio by currency 11% 12% 35% 21% 53% 37% 12% 19% < 50k 50-250k 250-500k 500k-1.5m >1.5m EUR USD Other currencies Notes: Loan portfolio by geographical segments and by sector in % of gross loan portfolio, contin
Slide 19: Loan portfolio quality
Loan portfolio quality IFRS 9 ► Share of default loans further reduced by 40bp since Dec-18 Net write- offs(1)(5) 0.4% 0.4% 0.2% Coverage ► Increased coverage of impaired loan to more than 93% impaired portfolio(2) 84.6% 90.8% 93.1% Coverage ratio ► Net write-off ratio of 0.2% in line with the group
Slide 20: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q3 2019 results | Frankfurt am Main, 13 November 2019 19
Slide 21: Asset reconciliation
Asset reconciliation ProCredit Group | Q3 2019 results | Frankfurt am Main, 13 November 2019 20
Slide 22: Liabilities and equity reconciliation
Liabilities and equity reconciliation Debt securities ProCredit Group | Q3 2019 results | Frankfurt am Main, 13 November 2019 21
Slide 23: Liquidity update
Liquidity update Liquidity coverage ratio ► Q3 increase in HLAs of EUR 220m, driven by strong 186% 187% 175% growth in deposits 100% 100% 100% ► YOY increase in HLAs by EUR 170m ► LCR comfortably above the regulatory minimum at all Sep-18 Dec-18 Sep-19 times LCR ratio Regulatory minimum Highly liqui
Slide 24: Regulatory capital and risk-weighted assets
Regulatory capital and risk-weighted assets Overview of capitalisation in EUR m Dec-18 Sep-19 ► CET1 ratio largely unchanged in 2019 CET1 capital 678 729 Additional Tier 1 capital 0 0 ► Decrease in total capital ratio due to early repayment of Tier 1 capital 678 729 subordinated debt Tier 2 capital
Slide 25: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q3 2019 results | Frankfurt am Main, 13 November 2019 24
Slide 26: Q&A ProCredit Bank Georgia
Q&A ProCredit Bank Georgia ProCredit Group | Q3 2019 results | Frankfurt am Main, 13 November 2019 25
Slide 27: Agenda
Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix ProCredit Group | Q3 2019 results | Frankfurt am Main, 13 November 2019 26
Slide 28: Overview of quarterly financial development
Overview of quarterly financial development In EUR m Q3-2018 Q4-2018 Q1-2019 Q2-2019 Q3-2019 Net interest income 47.2 46.9 45.4 47.3 51.0 Provision expenses -0.1 -4.5 2.1 2.0 -1.7 Net fee and commission income 13.3 14.8 12.7 13.1 13.1 Net result of other operating income 1.3 1.2 0.9 -1.3 2.4 Operati
Slide 29: Segment South Eastern Europe
Segment South Eastern Europe Regional loan portfolio breakdown Key financial data Bosnia (in EUR m) 9M 2018 9M 2019 Albania 6% 6% Net interest income 87.4 83.0 Bulgaria Romania 28% Provision expenses 1.3 1.8 8% Net fee and commission income 25.5 27.0 Net result of other operating income -2.5 -2.5 No
Slide 30: Segment Eastern Europe
Segment Eastern Europe Regional loan portfolio breakdown Key financial data Moldova (in EUR m) 9M 2018 9M 2019 11% Net interest income 41.7 48.3 Provision expenses -0.1 1.9 Net fee and commission income 6.9 7.2 Net result of other operating income 2.6 3.8 Operating income 51.3 57.4 Georgia 32% Ukrai
Slide 31: Segment South America
Segment South America Regional loan portfolio breakdown Key financial data (in EUR m) 9M 2018 9M 2019 Net interest income 11.0 12.2 Provision expenses -1.5 -1.2 Net fee and commission income 0.0 -0.4 Net result of other operating income 1.3 -0.8 Ecuador 100% Operating income 13.7 12.1 Operating expe
Slide 32: Structure of collateral
Structure of collateral Collateral by type ► Majority of collateral consists of mortgages ► Growing share of financial guarantees mainly as result of 20% InnovFin and other guarantee programmes provided by the European Investment Fund ► Clear, strict requirements regarding types of acceptable collat
Slide 33: Development of CET1 capital ratio (fully loaded)
Development of CET1 capital ratio (fully loaded) Leverage ratio Leverage ratio 11.0% 10.8% ProCredit Group | Q3 2019 results | Frankfurt am Main, 13 November 2019 32
Slide 34: Funding and rating
Funding and rating Funding sources overview 2%1% ► Highly diversified funding structure and counterparties 6% 4% ► Customer deposits main funding source, accounting for 72% as of Sep-19 supplemented by long-term funding from IFIs and Customer deposits institutional investors 15% Liabilities to IFIs
Slide 35: Balance sheet
Balance sheet in EUR m Sep-19 Dec-18 Assets Cash and central bank balances 1,086 964 Loans and advances to banks 251 212 Investment securities 337 297 Loans and advances to customers 4,710 4,392 Loss allowance for loans to customers -118 -124 Derivative financial assets 3 1 Property, plant and equip
Slide 36: Income statement by segment
Income statement by segment 01.01.- 30.09.2019 South Eastern Germany incl. Eastern Europe South America Group (in EUR m) Europe Consolidation Interest and similar income 97.5 107.2 19.8 -0.4 224.2 of which inter-segment 0.7 -0.1 0.0 16.4 0.0 Interest and similar expenses 49.2 24.2 7.6 -0.6 80.5 of w
Slide 37: Information regarding financial figures in this presentation
Information regarding financial figures in this presentation Q3 2019: ► Financial data for nine-month period ended 30 September 2019, as shown in the unaudited quarterly financial report ended 30 September 2019. Q2 2019: ► Financial data for six-month period ended 30 June 2019, as shown in the unaud
Slide 38: Contact Investor Relations
Contact Investor Relations Contact details Financial calendar Investor Relations Date Place Event information Quarterly Financial Report as of ProCredit Holding AG & Co. KGaA Christian Dagrosa 13.11.2019 30 September 2019 16:00 CET Analyst Conference Call tel.: +49 69 951 437 0 Deutsche Börse e-mail
Slide 39: 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