ProCredit group achieves strong loan portfolio growth of 8.9% in the first half of 2018

• 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%

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:


Andrea Kaufmann, Group Communications, ProCredit Holding, Tel.: +49 69 951 437 138,

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:

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.