ProCredit group achieves double-digit portfolio growth (10.2%) in the first nine months of 2018

• Strong growth in the first nine months of 2018: the gross loan portfolio increased by EUR 398 million or 10.2% (9M 2017: 5.6%) to EUR 4.3 billion
• At EUR 40.9 million, the consolidated result from ongoing business operations in the first nine months of 2018 is significantly above the 9M 2017 result (EUR 36.5 million)
• Steady increase of net interest income in 2018: Q1 EUR 46.6 million, Q2 EUR 47.1 million, Q3 EUR 48.0 million
• Increase in net fee and commission income by 12.1% to EUR 37.3 million (9M 2017: EUR 33.3 million) in the private and business client areas
• 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; ProCredit) reports dynamic growth in the first nine months of the year for the ProCredit banks, which are primarily active in South Eastern and Eastern Europe. Positioned in its markets as the Hausbank for small and medium-sized enterprises (SMEs), the ProCredit group has achieved growth of 10.2%, i.e. EUR 398 million, in its gross loan portfolio during the period, to EUR 4.3 billion (31 December 2017: EUR 3.9 billion). The ProCredit group was thus able to accelerate its positive development in comparison to the first three quarters of 2017 (9M 2017: 5.6% or EUR 204 million) and the entire 2017 financial year (8.0% or EUR 281 million).

The strong portfolio growth recorded for the first nine months of 2018 demonstrates how all of the ProCredit banks have effectively positioned themselves as “Hausbanks” for dynamic SMEs. During the previous financial year, portfolio development in the ProCredit group was still substantially impacted by the reductions in low-volume loans for very small businesses. The constant expansion of lending business with SMEs has led to positive effects for net interest income: steady increases have been recorded throughout the year, from EUR 46.6 million in the first quarter and EUR 47.1 million in the second quarter to EUR 48.0 million for the third quarter of 2018.

Our portfolio of green loans, which the ProCredit banks use to support environmentally responsible investments, showed a growth rate of 28.6%, thus outpacing the growth of the total loan portfolio. As of 30 September 2018, green loans accounted for 14.7% of the overall loan portfolio (31 December 2017: 12.6%). Moreover, green loans represented 18.0% of all investment loans at the banks as of 30 September 2018.

The ProCredit group’s consolidated result from ongoing business operations for the first nine months of 2018 amounted to EUR 40.9 million, which is higher than the EUR 36.5 million recorded for the same period of the previous year. The measures implemented in the previous financial year to increase efficiency are clearly reflected in lower operating expenses. Compared to the same period in the previous year, staff and administrative expenses decreased by 10.0%, or EUR 14.0 million, to EUR 126.1 million. Furthermore, net fee and commission income rose in both the private and business client areas by 12.1% to EUR 37.3 million overall.

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 nine months of the year, the share of non-performing loans decreased from 4.8% on 31 December 2017 to 3.5% as of 30 September 2018. The level of risk coverage for non-performing loans rose to 92% (31 December 2017: 83.3%).

Cost optimisations during the year led to an improvement in the cost-income ratio. This ratio decreased during the first nine months of 2018 to 70.1%, compared to a ratio of 73.1% for the same period in 2017. For the first half of the year, the cost-income ratio stood at 71.3%. This improvement of more than 1.2 percentage points was based on the increased operating result, particularly from higher interest, commission and other income.

At EUR 40.9 million, the ProCredit group’s overall consolidated result for the first nine months of 2018 was above the level recorded for the same period in 2017 (EUR 35.8 million).

The return on equity (RoE) stood at 7.7% as at 30 September 2018. Compared to the same period of the previous year, the RoE improved by 0.6 percentage points (9M 2017: 7.1%), despite the increase in the capital base.

Client deposits, which are the most important source of funding for the ProCredit banks, stood at EUR 3.7 billion as at 30 September 2018; this was the same level reported at the end of the 2017 financial year (31 December 2017: EUR 3.6 billion).

Borislav Kostadinov, member of the Management Board of ProCredit General Partner AG (sole liable managing entity of ProCredit Holding AG & Co. KGaA): “The result for the first nine months of 2018 shows the success of our clearly defined positioning as the Hausbank for dynamic SMEs, with a focus on the emerging markets in Eastern and South Eastern Europe. The strong portfolio growth in SME business in 2018 led to steady increases in net interest income from quarter to quarter. Additional improvement of the cost-income ratio since the second quarter has clearly been influenced by earnings. The growth in client deposits during the year by around EUR 100 million was due to business client deposits. This more than offset the reductions in smaller deposit volumes from private clients which resulted from the closing of outlets in connection with the implementation of our direct banking strategy.”

The Common Equity Tier 1 capital ratio (CET1 fully loaded) increased from 13.7% as at end-2017 to 14.5% as of 30 September 2018, underscoring the solid capitalisation of the ProCredit group. The 10% capital increase carried out in February 2018 had a significant influence on this ratio.

For 2018 as a whole, ProCredit Holding 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 quarterly report is available in the German and English languages as of today 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.