ProCredit group achieves good growth and solid financial results in 2019

• Customer loan portfolio grows by 10.3%, customer deposits by 14.2%
• Consolidated result of EUR 54.3 million at the upper end of the forecast corridor
• Consolidated result also reflects expenses from the successfully completed restructuring measures that were planned at the beginning of the year
• Progress in achieving group-wide SDG targets published separately today in Impact Report 2019

The ProCredit group, which is mainly active in South Eastern and Eastern Europe, recorded a successful financial year in 2019 overall. Growth in the customer loan portfolio of EUR 448 million or 10.3% was in line with targets (2018: EUR 482 million or 12.3%). The consolidated result of EUR 54.3 million was at the upper end of the forecast corridor and represents a return on equity of 6.9% (2018: EUR 54.5 million / 7.6%). The expenses incurred from the restructuring measures planned at the beginning of 2019 were in line with expectations and influenced the consolidated result.

For the ProCredit group, 2019 was a solid year in which important milestones were reached and steady results achieved. Full attention is now focused on the challenges that 2020 will bring for the group and its customers, as well as on the economies and societies in the individual countries in which we operate.

The EUR 448 million growth in the loan portfolio achieved in the past financial year was complemented by a further improvement in portfolio quality. Over the year, the share of non-performing loans in the total loan portfolio declined by 0.6 pp to 2.5% (2018: 3.1%). At 89.1%, the coverage ratio remained at a healthy level and was broadly similar to that of the previous year (90.8%).

Customer deposits increased by EUR 538 million in the financial year (2018: EUR 255 million), outpacing the loan portfolio growth. This positive development was driven by both business and private customers. The group’s liquidity position was also reinforced by the placement of green bonds as well as other funding initiatives. The liquidity coverage ratio (LCR) of 198% at the end of the year substantiates the group’s sound liquidity position.

At EUR 54.3 million, the consolidated result for 2019 was at the upper end of the forecast corridor. It incorporates the anticipated negative effects from the sale of ProCredit Bank Colombia (EUR –7.2 million), the completion of restructuring activities at ProCredit Bank Albania (EUR –2.8 million) and the goodwill write-down at ProCredit Bank Romania (EUR –2.0 million). Moreover, additional expenses were incurred from the energy-efficient modernisation of ProCredit Bank Kosovo’s office building (EUR –1.9 million). On the other hand, expenses for loss allowances dropped by EUR 5.7 million in the last quarter of the year. This was due to a further improvement in portfolio quality, inflows from written-off loans as well as updating the parameters for the credit risk model. Overall, there was a net release of EUR 3.3 million (2018: EUR 4.7 million) in provisioning expenses during the financial year. The cost-income ratio at the end of the financial year was 70.5%, slightly above the forecast target of 70%. The group’s capital base was stable during the financial year. As expected, the Common Equity Tier 1 capital ratio (CET1 fully loaded) was above 13% on 31 December 2019 and stood at 14.1%.

The ProCredit group remains committed to making a meaningful contribution to development and therefore supports the UN’s Sustainable Development Goals (SDGs). Further details and background information were published today in the group’s comprehensive Impact Report. In 2019, the green loan portfolio grew by 17.4% and at the end of the financial year accounted for 16.6% of the total customer loan portfolio (2018: 15.4%). The share of impaired loans in this rapidly growing portfolio was only 0.6% (2018: 0.7%). Moreover, the ProCredit group was able to reduce its own CO2 emissions by 19%. In the medium term, it is intended that the business activities of the ProCredit group will be CO2-neutral and that a green loans share of 20% in the overall portfolio can be achieved. In addition, there will be continued investment in training for employees in order to further strengthen their already high sense of social and ecological responsibility.

Looking forward and given the current developments with regard to the spread of COVID-19, the focus in 2020 will be on the safety of employees and customers, proactive risk management and customer support. The management considers the group’s overall situation to be stable and sees the group’s primary task as providing customers with the support they need: “The strategic initiatives of recent years form a good foundation for meeting the challenges that lie ahead. Close relationships with carefully selected customers at a reduced number of branches enables the group to ensure efficient control of credit risks. Thanks to our tried and tested digital banking platform, day-to-day customer business is not dependent on physical presence and thus remains largely unimpaired. The exceptionally high qualification levels of our staff, who have always been the focus of our business strategy, also put us in an excellent position to meet and overcome the challenges that lie ahead.”

Under the current circumstances, a declining but positive return on equity is expected with a stable cost-income ratio of approximately 70%. Growth in the customer loan portfolio is expected to be more modest than in 2019, lying in the lower single-digit percentage range. These forecasts are based on current assessments of the overall situation, which may change in the coming days and weeks due to the very dynamic developments surrounding the COVID-19 pandemic. Even in the event of a widespread deterioration in the overall situation, and taking into account the planned dividend payment of one third of consolidated profit for 2019, a Common Equity Tier 1 ratio (CET1 fully loaded) of over 13% is still expected at the end of 2020.

Given the ProCredit group’s clearly focused business model, its close customer relationships and conservative risk strategy, the Management Board continues to view the group’s medium-term development positively and endorses the medium-term goals set.

The ProCredit group Annual Report 2019, the non-financial Impact Report 2019 and the Disclosure Report 2019 are available as of today in the Investor Relations section of the ProCredit Holding website

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 press release contains statements relating to our future business development and financial performance, as well as statements relating to future actions or developments affecting ProCredit Holding which may constitute forward-looking statements. Such statements are based on the management of ProCredit Holding’s current expectations and specific assumptions, many of which are beyond the control of ProCredit Holding. They are therefore subject to a multitude of risks, uncertainties and factors. Should one or more of these risks or uncertainties materialise, or should underlying expectations or assumptions prove incorrect, then the actual results, performance and achievements (both negative and positive) of ProCredit Holding may differ significantly from those expressed or implied 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.