- The ProCredit group recorded strong growth
in the first half of 2018: the gross loan portfolio increased by EUR 350
million or 8.9% (H1 2017: 4.8%) to EUR 4.3 billion
- At EUR 26.7 million, the consolidated result from ongoing business operations in
H1 2018 is significantly above the H1 2017 result
(EUR 20.8 million)
- Implementation of the direct banking concept
for private clients led to an 11.1% increase in net fee and commission income
to EUR 24.0 million (H1 2017: EUR 21.6 million)
- Forecasts for 2018 confirmed: gross loan
portfolio growth of 12 to 15% and a return on equity of 7.5 to 8.5%
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Frankfurt am Main, 14 August 2018 – ProCredit Holding
AG & Co. KGaA (ProCredit Holding) reports dynamic growth for the ProCredit
banks, which are primarily active in South Eastern and Eastern Europe.
Positioned as the “Hausbank” for small and medium-sized enterprises (SMEs), the
ProCredit group achieved gross loan portfolio growth of 8.9% or EUR 350 million
in the first half of 2018, bringing the total portfolio to EUR 4.3 billion (31 December
2017: EUR 3.9 billion). The ProCredit group was thus able to
build on the positive development recorded for H1 2017 (4.8% or EUR 173 million)
and the entire 2017 financial year (8% or EUR 281 million).
Until the end of the 2017 financial year, loan
portfolio development in the ProCredit group was influenced by the
transformation process which accompanied the strategic focus on SMEs with good development
perspectives. The strong growth recorded for the first half of 2018
demonstrates how all of the ProCredit banks have effectively positioned
themselves as “Hausbanks” for dynamic SMEs.
Borislav Kostadinov, member of the Management Board of ProCredit
General Partner AG (sole liable managing entity of ProCredit Holding AG &
Co. KGaA): “The first half of 2018 was very good
for the ProCredit group. We recorded strong portfolio growth, even
higher in the first half of 2018 than in the entire previous financial year.
This shows that we were able to continue with the planned expansion of our
business with SME clients. This significant growth is precisely
why we strengthened our capital base with a successful capital increase in
February 2018. Our success derives from the high quality advice and
performance of our staff, combined with our successful positioning as reliable
Hausbanks for SMEs.”
Our portfolio of green loans, which the
ProCredit banks use to support environmentally responsible projects, showed
strong growth as well: As of 30 June 2018, these loans accounted for 13.9% of
the overall loan portfolio (31 December 2017: 12.6%). Moreover, green loans
represented 17.2% of all investment loans as of 30 June 2018.
The ProCredit group’s consolidated result from ongoing
business operations for the first half of 2018 amounted to EUR 26.7 million, which
is higher than the EUR 20.8 million recorded for the same period of the
previous year. The measures implemented in the previous financial year to
increase efficiency are now clearly reflected in lower operating expenses.
Compared to the same period in the previous year, staff and administrative
expenses decreased by 12.3%, or EUR 11.7 million, to EUR 83.5 million.
Furthermore, with the introduction of our direct banking concept for private
clients, net fee and commission income was increased by 11.1% to EUR 24.0 million.
Targeted marketing campaigns during the second half of 2018 aim to further
increase awareness.
Risk provisioning expenses remained low, which also
had a positive effect on the consolidated result. This development is based on constant
improvements in portfolio quality. Over the course of
the first six months of the year, the share of non-performing loans decreased
from 4.8% on 31 December 2017 to 3.7% as of 30 June 2018. The level of risk
coverage for non-performing loans rose to over 90%.
The cost-income ratio decreased for the first six
months of 2018 to 71.3%, compared to a ratio of 75.1% for H1 2017. The
improvements visible in this ratio are a reflection of the successfully
implemented cost-efficiency measures.
At EUR 26.7 million, the ProCredit group’s overall
consolidated result was above the level recorded for the first half of 2017
(EUR 23.6 million).
Mr Kostadinov elaborated: “We are satisfied with
our results for the first half of the year as well. Cost reductions in the
branch network made strong contributions to this positive development. Our
direct banking concept for private clients is starting to bear fruit: We
primarily target clients from the growing middle class, as they see the clear
added value of comfortable and simple banking via digital channels. This
enabled us to achieve growth in our net fee and commission income.”
The return on equity (RoE) stood at 7.5% as at 30 June
2018. Compared to the same period of the previous year, the RoE improved by 0.5
percentage points (H1 2017: 7.0%), despite the increase in the capital base.
Client deposits, which are the most important source
of funding for the ProCredit banks, stood at EUR 3.6 billion as at 30 June 2018;
this was the same level reported at the end of the 2017 financial year and is
slightly above the EUR 3.5 billion recorded end-2016. This is a very positive
achievement, particularly in light of the significant reduction of our branch
network and the digitisation of private client services. The decrease in small
deposit volumes connected with closing branches was offset entirely with
growing deposits from business clients.
The Common Equity Tier 1 capital ratio (CET1 fully
loaded) increased from 13.7% as at end-2017 to 14.6%, underscoring the solid
capitalisation of the ProCredit group. The 10% capital increase carried out in
February 2018 had a significant influence on this ratio.
Capital requirements according to the
Supervisory Review and Evaluation Process (SREP) were provided to ProCredit
Holding for the first time in Q2 2018. The SREP requirement for the ProCredit
group for 2018 was set at 8.1% for the CET1 capital ratio, 10.1% for the Tier 1
capital ratio and 12.9% for the total capital ratio, taking into account the
capital buffers. The ProCredit group’s capital base is comfortably above these
requirements.
For 2018 as a whole, ProCredit confirms the forecasts
presented in the published 2017 Annual Report: gross loan portfolio growth of
12 to 15% is still anticipated. Depending on the development of the net
interest margin and loan portfolio growth, the RoE is expected to be between
7.5% and 8.5% for the 2018 financial year.
The group’s half-year report is available from today
in German and English on the ProCredit Holding website under Investor Relations
at: http://www.procredit-holding.com/investor-relations/reports-publications/financial-reports/
Contact:
Andrea Kaufmann, Group Communications, ProCredit
Holding, Tel.: +49 69 951 437 138,
E-mail: Andrea.Kaufmann@procredit-group.com
About
ProCredit Holding AG & Co. KGaA
ProCredit Holding AG & Co. KGaA, based in
Frankfurt am Main, Germany, is the parent company of the development-oriented
ProCredit group, which consists of commercial banks for small and medium
enterprises (SMEs). In addition to its operational focus on South Eastern and
Eastern Europe, the ProCredit group is also active in South America and
Germany. The company’s shares are traded on the Prime Standard segment of the
Frankfurt Stock Exchange. The anchor shareholders of ProCredit Holding AG &
Co. KGaA include the strategic investors Zeitinger Invest and ProCredit Staff
Invest (the investment vehicle for ProCredit staff), the Dutch DOEN
Participaties BV, KfW Development Bank and IFC (part of the World Bank Group).
As the group’s superordinated company according to the German Banking Act,
ProCredit Holding AG & Co. KGaA is supervised on a consolidated level by
the German Federal Financial Supervisory Authority (Bundesanstalt für
Finanzdienstleistungsaufsicht, BaFin) and the German Bundesbank. Further
information is available on our website: www.procredit-holding.com
Forward-looking statements
This report contains forward-looking
statements. Forward-looking statements are statements that do not describe past
events. They include statements on the assumptions and expectations of
ProCredit Holding as well as underlying assumptions. These statements are based
on the plans, estimates and forecasts currently available to the Management of
ProCredit Holding. Forward-looking statements therefore pertain solely to the
date on which they are made. ProCredit Holding undertakes no obligation to
update these statements in the event of new information or future events.
Forward-looking statements naturally involve risks and uncertainties. A number of
important factors can contribute to the fact that actual results may differ
materially from forward-looking statements. These factors could include major
disruptions in the Eurozone, a significant change in foreign trade or monetary
policy, a worsening of the interest rate margin or pronounced exchange rate
fluctuations. Should any of these factors arise, the impact could be manifested
in decreased loan portfolio growth and an increase in past-due loans, and thus
result in lower profitability.