A profitable, development-oriented commercial banking group … · 2017-12-08 · A profitable,...

A profitable, development-oriented commercial banking group for SMEs with a focus on Eastern Europe

German Equity Forum 2017 Presentation

1

ProCredit – A unique approach to banking

► “Hausbank” for SMEs

► Digital private client offer

► Headquartered in Frankfurt and supervised by BaFin

and Bundesbank

► Track record of high-quality loan portfolio

► Profitable every year since creation as a banking

group in 2003

► Listed on Frankfurt Stock Exchange

Customer loans€3.8bn

Q3’17 YTD loan

growth in core loan

category(4)

CET 1 ratio(3)

ProCredit

banks

13.3%

12.9% 13

17.5%

14.5%

13.8%11.0%

9.4%

33.8%

Germany

(ca. 2% of gross

loan portfolio)

South Eastern Europe and Eastern Europe

(ca. 91% of gross loan portfolio)

South America(1)

(ca. 6% of gross

loan portfolio)

Shareholder structure(2)

Notes: Footnotes on page 18 of this presentation

2

We deliver on our guidance

► Return on average equity (RoAE)

► Growth of the total gross loan portfolio(1)

► CET1 ratio (fully loaded)

► Dividend payout ratio

In the mid-term, and taking into consideration a stabilising political, economic and operating environment, we see potential for approx.

10% p.a. growth of the gross loan portfolio, a cost-income ratio (CIR) < 60%, and a return on average equity (RoAE) of approx. 10%.

► Growth of the gross loan portfolio in

the target loan categories (>EUR 30,000)(1) +13%

+6%

7.1% (annualised)

13.3%

n.a.

Continued strong growth in the

SME segment

Decrease of non-core loan categories

largely completed by end of 2017

Profitable third quarter with ROE of

7.4%

Positive impact from disposal of El

Salvador expected in Q4

Confirmation of dividend policy

> 10%

> 8%

7 – 9%

> 13%

1/3 of

profits

Outlook for ProCredit group 2017 Actuals

9M 2017CommentaryGuidance

2017


3

How ProCredit does business

True customer

focus as

“Hausbank” for

SMEs

Continuous

training of

employees

Prudent risk

management

Development

orientation

► >90% business

loans

4

True customer focus as “Hausbank” for SMEs

“I always feel that

ProCredit Bank is

there to support me.”

Construction materials producer - Georgia

► Simple loan and

deposit facilities

► Business Client

Advisers’ focus:

clients and risk

► Trustful long-term

relationships and true

understanding

of clients’ needs

and risks

Windows and doors producer - Romania Dairy farm - Albania

Producer of tool systems

for CNC machines - Bulgaria

Comprehensive service

as “Hausbank” for

SMEs

5

Continuous training of employees

ProCredit Entry Programme Continuous training International management

development

► Mandatory for all new recruits

► 6-month training programme

before final hiring

► Salary linked to training level

► “Up-or-out” in first two years,

long-term prospects thereafter

► ProCredit Management

Academy

► ProCredit Banker Academy

► Enables rapid diffusion of best practices

► Results in a closely-knit management network

► Integrates employees into a unique corporate culture

6

Prudent risk management

Diversified loan portfolio(1) Consistently low net write-offs(2)

0%

1%

2%

3%

4%

5%

2007 2010 2013 2016

Average net write-offs

Bulgaria19%

Serbia17%

Kosovo13%Macedonia

7%

Romania6%

Albania5%

Bosnia4%

Ukraine10%

Georgia8%

Moldova3%

Ecuador5%

Colombia1%

Mexico

Germany2%

South Eastern

Europe:

70%

Eastern Europe:

21%

South America:

6%

0.8%


7

Development orientation

Fostering entrepreneurs

and SMEs

Social responsibility Environmental responsibility

► Focus on SMEs as drivers of

economic growth and employment

in emerging countries

► Strong leverage in terms of job

generation and prosperity

► No focus on consumer lending

► No complex products

► Promotion of price and

banking sector transparency

► Rigorous approach regarding

AML and informal clients

► State-of-the-art standards to

minimise the environmental

impact of ProCredit’s lending

operations

► Focus on promotion of “green”

investments

► Strict exclusion lists

ISO 14 001

9.8%9.1%

7.8%

6.3%

4.3%

Bank 1 Bank 2 Bank 3 Bank 4 ProCredit

Non-performing loans in Eastern Europe 2016(1) Green loan portfolio in % total loans

3.0%4.0%

6.4%

9.1%

11.3%

Dec-13 Dec-14 Dec-15 Dec-16 Sep-17


8

Excellent positioning for profitable growth

Focused group

profile

Strong growth

dynamics

Above-sector

profitability and

stability

Modern network and

platform built for

scale

9

Key facts: Focused group profile on SMEs

Focused growth in SME loan categories(1)

Regional focus on South Eastern

Europe and Eastern Europe

Decrease in overall branch network

Decrease in number of cash

desk transactions

Decrease in number of total

group staff

Increase in loan portfolio per

total group staff

58%

81%87%

Dec-13 Dec-16 Sep-17

Loan portfolio > EUR 30k in % total loan portfolio

71%

89% 91%


SEE and EE as % of gross loan portfolio

31767 54

328

224102


Number of service points

Number of branches

645

156

291

28%

5%2%


YTD Cash desk transactions in % total transactions

11,514

4,078 3,522


Number of total group staff

363

890

1,088


Gross loan portfolio per total group staff

(in

EU

R k

)


Sep 2017 YTD

-25% (EUR -169m) 13% (EUR +377m) +6%

Initial loan size

(in EUR)

EUR 133m EUR 369m

FY 2016

-28% (EUR -256m) 13% (EUR +336m) +2%

Initial loan size

(in EUR)

EUR 185m EUR 486m

10

Strong volume growth in core loan categories

9M-

2017

FY

2016


Branches in selected

strategic locations

11

Modern network and platform built for scale

► Modern network and customer experience

► Simple, unified offer for target private clients

► State-of-the-art IT systems developed by own IT

subsidiary

54

Service points, all equipped

with 24/7 self-service areas102

www.procreditbank-direct.com

https://www.procreditbank-direct.com/

9M-2017

12

Above-sector profitability and stability

► Strong track record of profitability

► > 9% average RoAE since 2005(4)

► Profitable every year since creation as a

banking group in 2003

► Significantly higher RoAE level and stability

compared to the sector

Group net income and RoAESEE segment RoAE vs sector

-5%

5%

15%

2013 2014 2015 2016

SEE banking sector RoAE ProCredit SEE segment RoAE(2) (3)

Net income(1) Group RoAE annualised(1)


Q&A

13

14

Appendix

15

Q3 2017 results at a glance

In EUR m Q2-2017 Q3-2017 9M-2016 9M-2017 y-o-y

Income

statement

Net interest income 51.3 50.4 175.6 153.0 -13%

Provision expenses 0.5 1.1 16.8 4.5 -73%

Net fee and commission income 10.9 11.7 32.1 33.3 4%

Net result of other operating income 0.5 2.8 1.5 5.3 n.m.

Operating income 62.2 63.8 192.3 187.1 -3%

Operating expenses 47.9 44.9 144.5 140.1 -3%

Operating results 14.3 18.9 47.9 47.0 -2%

Tax expenses 3.0 3.2 11.2 10.5 -6%

Profit from continuing operations 11.3 15.7 36.6 36.4 -1%

Profit from discontinued operations 0.4 -3.4 -1.1 -0.7 -41%

Profit of the period 11.7 12.2 35.5 35.8 1%

Key performance

indicators

Change in loan portfolio > EUR 30,000 4.7% 2.7% 7.7% 12.9% 5.1pp

Return on average equity(1) 6.9% 7.4% 7.6% 7.1% -0.5pp

CET1 ratio (fully loaded) 13.0% 13.3% 10.6% 13.3% 2.7pp

Additional

indicators

Net interest margin(1) 4.0% 3.9% 4.8% 3.9% -0.9pp

Net write-off ratio(1)(2) 0.1% 0.2% 0.6% 0.3% -0.3pp

Loans in PAR30 3.7% 3.5% 4.7% 3.5% -1.2pp

Impaired loans 5.8% 5.4% 7.7% 5.4% -2.3pp

Cost-income ratio 76.4% 69.3% 69.1% 73.1% 4.1pp

Book value per share 12.01 12.14 11.86 12.14 2%


16

Long-standing and well-interconnected

management teams at group and local level

16

► Credit risk management

► Investor relations

► Communications

► Environmental management

and impact reporting

32(1)

► Risk control

► Financial risk

► Operational risk

► AML

10

► Human resources

► IT

► Business support

► Compliance & legal

► Internal audit

34(1)

► Finance and

controlling

► Treasury and

funding

Experienced management collaborating at Holding and local level

Borislav Kostadinov Dr. Anja Lepp Sandrine Massiani Dr. Gabriel Schor

Local ProCredit banks(2)

Years of experience within ProCredit; Seat at supervisory board of local bank;

33 key management members On average 14 years of experience within ProCredit | 18 female/15 male

► Central training in Fürth

► English as lingua franca (> 50 courses p.a.)

► Regular specialist events and regional

meetings

Collective training…

► Strict common operating standards and

policy guidelines

► Strong, standardised MIS reporting

► Holding management with supervisory

board seats at local banks involved in

strategic business processes

► Common set of values

► Closely-knit network

► Rapid diffusion of best practices

…as catalyst for a shared vision and teamwork… …supported by clear framework


17

Key management

Key management of the ProCredit banks in South Eastern / Eastern Europe and South America

Colombia Ecuador

Ecuador Georgia Georgia Georgia Georgia Kosovo Kosovo Macedonia Macedonia Moldova

Moldova Romania Romania Serbia Serbia

Albania Albania BiH BiH BiH Bulgaria Bulgaria Bulgaria Bulgaria

Macedonia

Serbia Ukraine Ukraine Ukraine UkraineSerbia

South Eastern Europe Eastern Europe South America

► Average age: 39

► Average years with ProCredit: 14

► 29 ProCredit Management Academy graduates

► 18 female/15 male

(1) The South America segment also includes the institution

“Administración y Recuperación de Cartera Michoacán S. A” (ARDEC) in

Mexico, 0.2% of Group assets

(2) Shareholder structure according to the voting right notifications as

published on our website www.procredit-holding.com

(3) fully loaded

(4) Growth in loans > EUR 30,000

Slide 2:

(1) Adjusted guidance as of ad-hoc notification on 7 July 2017

Slide 6

(1) Loan portfolio by geographical segments in % of total loan portfolio

(EUR 3,832m as per 30-Sep-17); Excluding assets held for sale, as per 30-

Sep-17, Thessaloniki branch's loan portfolio part of ProCredit Bank Bulgaria

loan portfolio

(2) Net write-offs to gross loan portfolio ratio

Slide 7

(1) In % of total loans; Western banks’ NPL ratio as per RBI CEE Research

Report June 2017 based on aggregated data of CEE subsidiaries and

comprising individual banks’ CEE segment (Bank 1: Poland, Hungary,

Czech Republic, Slovakia, Bulgaria, Romania, Croatia, Albania, Serbia,

Bosnia and Herzegovina, Kosovo, Belarus, Russia, Ukraine. Bank 2:

Hungary, Czech Republic, Slovakia, Romania, Croatia, Serbia. Bank 3:

Poland, Hungary, Czech Republic, Slovakia, Slovenia, Bulgaria, Romania,

Croatia, Serbia, Bosnia and Herzegovina, Russia. Bank 4: Poland, Czech

Republic, Slovenia, Bulgaria, Romania, Croatia, Serbia, Russia); Data of

ProCredit includes SEE and EE segment, NPL ratio based on local

definition of ProCredit banks; Source: RBI CEE Research Report June

2017

Slide 10

Note: All related figures and ratios for Dec-13 relate to the subsidiaries as

shown in the consolidated financial statement as of 2013

(1) Loan portfolio > EUR 30k initial loan size in % of customer loan portfolio

by outstanding principal

Slide 9

Note: Loan volume growth split by initial loan size in all segments

Slide 12

(1) Excl. non-controlling interest

(2) Includes Romania, Bulgaria, Croatia, Serbia, Bosnia and Herzegovina

and Albania. Source: RBI CEE Research Report June 2017

(3) Includes Albania, Bosnia and Herzegovina, Bulgaria, Kosovo,

Macedonia, Romania and Serbia

(4) RoAE since 2005 and publicly available in “Bundesanzeiger”

Slide 15

Note: P&L-related figures and ratios, unless indicated otherwise, are based

on continuing operations; i.e. excluding Banco PyME Los Andes ProCredit

Bolivia, ProConfianza Mexico, Banco ProCredit El Salvador and Banco

ProCredit Nicaragua for 2017 and 2016; Return on average equity, CET1

ratio, and dividend payout ratio also include discontinued operations

(1) Annualised

(2) Net write-off ratio always presented YTD

Slide 16

(1) Including experience with Internationale Projekt Consult GmbH

(2) Data as at October 2017; Not including ProCredit Bank Germany

18

Notes

19

Disclaimer

The material in this presentation and further supporting documents have

been prepared by ProCredit Holding AG & Co. KGaA, Frankfurt am

Main, Federal Republic of Germany (“ProCredit Holding”) and are

general background information about the ProCredit group’s activities

current as at the date of this presentation. This information is given in

summary form and does not purport to be complete. Information in this

presentation and further supporting documents, including forecast

financial information, should not be considered as advice or a

recommendation to investors or potential investors in relation to holding,

purchasing or selling securities or other financial products or instruments

and does not take into account your particular investment objectives,

financial situation or needs. Before acting on any information you should

consider the appropriateness of the information having regard to these

matters, any relevant offer document and in particular, you should seek

independent financial advice. All securities and financial product or

instrument transactions involve risks, which include (among others) the

risk of adverse or unanticipated market, financial or political

developments and, in international transactions, currency risk.

This presentation and further supporting documents may contain

forward-looking statements including statements regarding our intent,

belief or current expectations with respect to the ProCredit group’s

businesses and operations, market conditions, results of operation and

financial condition, capital adequacy, specific provisions and risk

management practices. Readers are cautioned not to place undue

reliance on these forward-looking statements. ProCredit Holding does

not undertake any obligation to publicly release the result of any

revisions to these forward-looking statements to reflect events or

circumstances after the date hereof to reflect the occurrence of

unanticipated events. While due care has been used in the preparation

of forecast information, actual results may vary in a materially positive or

negative manner. Forecasts and hypothetical examples are subject to

uncertainty and contingencies outside ProCredit Holding’s control. Past

performance is not a reliable indication of future performance.

A profitable, development-oriented commercial banking group … · 2017-12-08 · A profitable,...

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