• Gross loan portfolio growth of 1.7%
• Negotiations for the sale of ProCredit Bank Colombia successfully concluded
• Consolidated result of EUR 10.7 million in line with the group’s expectations
• Full-year forecast confirmed
For ProCredit Holding AG & Co. KGaA (ProCredit Holding) and the ProCredit banks, which are primarily active in South Eastern and Eastern Europe, the start of the 2019 financial year was in line with the company’s expectations. Positioned in its markets as the Hausbank for small and medium-sized enterprises (SMEs), the ProCredit group has achieved growth of 1.7% (Q1 2018: 2.8%), i.e. EUR 73 million, in its gross loan portfolio since the beginning of the year, to EUR 4.4 billion.
This portfolio growth was the result of a solid increase in loans to clients in all segments outside Germany. The development in Germany was influenced by the sale of the project finance portfolio. Overall, growth was in line with the expectations set forth in the business plan.
The volume of customer deposits amounted to EUR 3.8 billion at the end of the first quarter. The drop in deposits of EUR 27 million or 0.7% since year-end was due to the seasonal decrease in business client deposits. Compared to the previous year, deposits from private clients have clearly stabilised.
The ProCredit group’s consolidated result for the first quarter of 2019 amounted to EUR 10.7 million, and was thus EUR 3.9 million lower than the result for the same period of the previous year (Q1 2018: EUR 14.6 million).
As expected, expenses for risk provisioning rose by EUR 2.5 million during the current financial year compared to the same period of the previous year. At 3.1%, the share of credit-impaired loans in the overall loan portfolio and their risk coverage ratio generally remained at the same very good level reported at year-end 2018. Another factor impacting the consolidated result was a consequence of the strategic decision to sell ProCredit Holding’s shares in Banco ProCredit Colombia S.A. during the current financial year. Agreement over the sale has already been reached. Completion of the transaction is subject to the approval of the Colombian authorities. The result from discontinued operations, amounting to EUR -1.8 million, primarily reflects the anticipated losses from this transaction.
Interest income increased by more than EUR 5 million to EUR 70.7 million compared to the same period of the previous year. Interest expenses also increased due to higher liquidity levels and to the growing proportion of long-term liabilities in total liabilities and equity. Net interest income fell slightly compared to the same period in the previous year.
The EUR 1.3 million rise to EUR 12.7 million in net fee and commission income compared to the result for the same period of the previous year derives mostly from the introduction of the direct banking strategy during 2018. Furthermore, the acquisition of new business clients is leading to higher fee income from payment transactions.
The ProCredit group’s cost-income ratio for the first quarter of 2019, at 69.8%, was on a par with the previous year’s figure. The Common Equity Tier 1 capital ratio, at 14.3%, also matched the level reported at year-end 2018.
ProCredit reconfirms its forecast of 10%–13% growth of the gross loan portfolio for the year as a whole. The group also reiterates its forecast of a cost-income ratio of below 70% and a consolidated result of between EUR 48 million and EUR 55 million. The Common Equity Tier 1 capital ratio (CET1 fully loaded) is expected to exceed 13%.
During the current financial year Fitch Ratings confirmed its Long-Term Issuer Default Rating (IDR) of ‘BBB’ with Stable Outlook, and ProCredit Holding’s so-called Viability Rating was raised from bb- to bb. This was prompted, among other things, by the solid capital and risk indicators.
The ProCredit group’s quarterly report is available in the German and English languages as of today on the ProCredit Holding website under Investor Relations at https://www.procredit-holding.com/en/investor-relations/reports-publications/financial-reports/.
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: www.procredit-holding.com.
This press release contains statements which refer to our future business operations and future financial performance parameters, as well as to future events or developments relating to ProCredit Holding, and which could be regarded as forward-looking statements. Such statements are based on present expectations and certain assumptions on the part of the Management of ProCredit Holding. They are therefore subject to numerous risks, uncertainties and contingencies, many of which lie outside ProCredit Holding’s control. If one or several of these risks or uncertainties should materialise, or if it should transpire that the underlying expectations are not fulfilled or the assumptions were not correct, then the actual results, performance and success of ProCredit Holding may differ in a materially positive or negative manner from those results that were explicitly or implicitly mentioned in the forward-looking statement. ProCredit Holding does not undertake any obligation to update these forward-looking statements or to correct them in the event of deviations from the expected development.