• Consolidated result of EUR 44.0 million since the beginning of the year (9M 2018: EUR 40.9 million) well in line with expectations
• Significantly improved result in the third quarter to EUR 21.1 million (Q2 2019: EUR 12.2 million; Q1: EUR 10.7 million), among other factors attributable to strong increase in net interest income
• Strong growth in customer deposits of EUR 348 million or 9.1% since the beginning of the year (9M 2018: 2.8%)
• Continued solid growth in the gross loan portfolio of 8.3% or EUR 360 million since the beginning of the year
• Full-year forecast confirmed
The ProCredit group and its banks, which are primarily active in South Eastern and Eastern Europe, showed very positive business development in the third quarter of 2019. Relative to the same period of the previous year, the consolidated result of the group increased to EUR 44.0 million (9M 2018: EUR 40.9 million). Customer deposits recorded strong growth of EUR 348 million or 9.1% to EUR 4.1 billion. Since the beginning of the year, the gross loan portfolio has grown by 8.3% or EUR 360 million to EUR 4.7 billion.
The ProCredit group continues to benefit from its positioning as the Hausbank for small and medium-sized enterprises (SMEs) and the implementation of the digital ProCredit DIRECT strategy. The improvement in earnings is primarily attributable to the increase in net interest income in the third quarter by 7.8% to EUR 50.9 million (Q2 2019: 47.3 million). This was driven both by continued portfolio growth and a slight increase in the net interest margin compared with the previous quarters.
Customer deposits grew strongly over the past nine months by EUR 348 million. This is significantly higher than in the same period of the previous year (9M 2018: EUR 99 million). Deposits from both private and business customers increased in the third quarter. This positive development reflects the successful implementation of the Hausbank concept and the ProCredit DIRECT strategy.
The increase in net fee and commission income by EUR 1.6 million to EUR 38.9 million in the first nine months of the year (9M 2018: EUR 37.3 million) is mainly due to the introduction of the direct banking offer.
Operating expenses for the first nine months of the year increased by EUR 3.1 million to EUR 126.1 million, particularly due to increased marketing efforts for ProCredit DIRECT. Quarterly operating expenses of EUR 42.7 million remained essentially stable compared to the previous quarter (Q2 2019: EUR 42.3 million). A minor increase in staff costs was largely offset by lower administrative expenses.
The result from discontinued operations of EUR -1.9 million for the first nine months of 2019 primarily consists of the anticipated losses from the sale of ProCredit Bank Colombia. As previously announced, ProCredit Holding successfully completed the sale of this entity in October 2019. The transaction is expected to have a further negative effect of approximately EUR 5 million in the fourth quarter of 2019, mainly due to the deconsolidation and related currency effects.
At 68.4%, the cost-income ratio for the first nine months of 2019 was below the previous year’s level (9M 2018: 69.2%) due to improvements in earnings. At 14.3%, the fully loaded Tier 1 capital ratio as of 30 September 2019 remained at the comfortable level of year-end 2018.
The expansion of the “green” loan portfolio continues to be of high strategic importance for the ProCredit group. The growth of green loans by 10.2% over the past nine months to EUR 746.6 million exceeded the growth of the total loan portfolio. The green loan portfolio accounted for 15.9% of the total loan portfolio as at 30 September 2019. This underscores the good positioning of the ProCredit group as a partner for financing green and sustainable investments in the SME sector.
The quality of the portfolio also improved after the first nine months of 2019 compared with the end of the previous year. At 2.7%, the share of non-performing loans in the total loan portfolio was below the already good level at the end of 2018 (31 December 2018: 3.1%). The risk coverage ratio also improved, from 90.8% to 93.1% as of 30 September 2019.
The group confirms its forecast of 10-13% growth of the gross loan portfolio for the year as a whole, assuming no significant volatility in the exchange rates. It also reiterates its forecast of a cost-income ratio of below 70% and a consolidated result of between EUR 48m and EUR 55m. It is expected that the Common Equity Tier 1 capital ratio (CET1 fully loaded) will continue to exceed 13%.
The ProCredit group’s quarterly report as of 30 September 2019 will be available in German and English on the ProCredit Holding website as of today in the Investor Relations section at https://www.procredit-holding.com/investor-relations/reports-and-publications/financial-reports/ .
Andrea Kaufmann, Group Communications, ProCredit Holding, Tel.: +49 69 95 14 37 138,
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.