ProCredit group: significant improvement in result for first half of 2021 with continued strong growth

• Growth in customer loans by 7.7% and in customer deposits by 2.5%
• Increase in profit after tax by 68%; consolidated result of EUR 36.4 million represents return on equity of 9.1%
• Decrease in provision expenses leads to annualised cost of risk of 10 basis points, with improvement in portfolio quality
• Increase in net interest income results in significant improvement of cost-income ratio to 64.4%
• As communicated in July, Management Board raises forecast for return on equity for 2021 to 8.0% – 9.5%
• First Capital Markets Day to be held virtually on 12 October 2021

The ProCredit group, which is mainly active in South Eastern and Eastern Europe, reports strong results for the first half of 2021. The customer loan portfolio grew by EUR 402 million or 7.7%, once again reflecting the strong growth rates seen in previous periods (H1 2020: EUR +255 million or 5.3%). The consolidated result increased by 68% to EUR 36.4 million (H1 2020: EUR 21.7 million), representing a significantly improved return on equity of 9.1% (H1 2020: 5.5%). Based on the strong financial results for the first half of the year, on 23 July 2021 the Management Board raised its forecast for return on equity for the 2021 financial year to 8.0% – 9.5% (previously 6.0% – 7.5%).

ProCredit’s management takes a positive view on the half-year results and prospects for the group: “We are pleased with these results and acknowledge how well our colleagues have been able to drive our business strategy forward under very difficult market conditions. Our key strengths continue to lie in the close relationships we cultivate with carefully selected clients, in our ability to manage credit risk effectively and in our highly digitalised business processes. As we begin to emerge from the COVID-19 pandemic, our SME clients, which are so important for sustainable economic recovery, are looking to the future with growing confidence. We believe that the ProCredit banks can play a central role in enabling the continued success of these clients. As such, we are strengthened in our belief that our sustainable approach, and not one based on the aggressive consumer lending which currently dominates our markets, is the right way to create meaningful impact in emerging economies and societies whilst generating sustainable returns for the ProCredit group.”

The ProCredit group’s portfolio growth of EUR 402 million or 7.7% significantly exceeded the already good growth figures from the previous year (H1 2020: EUR +255 million or 5.3%). All ProCredit banks recorded good growth rates of at least 4.5%. As of 30 June 2021, the green loan portfolio amounted to EUR 1.1 billion (31 December 2020: EUR 1.0 billion), representing 19.1% of the total portfolio. Financing in the renewable energies segment continued to develop particularly well.

Customer deposits also showed good growth in the first half of 2021. The deposit growth of EUR 123 million or 2.5% was around the level recorded for the previous period (H1 2020: EUR +113 million, +2.6%). The increase in deposits was mainly in the area of sight deposits and savings deposits and can be attributed in particular to our direct banking business with private customers.

Low cost of risk and rising revenues drive improvement in result

The profit after tax of EUR 36.4 million represents a return on equity of 9.1%, a significant improvement over the previous year (H1 2020: EUR 21.7 million or 5.5%). The 68% increase in the result was due on the one hand to lower cost of risk and on the other to a EUR 5.0 million rise in operating income. The cost base was again largely stable, further improving the cost-income ratio to 64.4% (H1 2020: 66.5%).

Portfolio quality improved slightly over the first half of 2021 compared to year-end 2020. As of 30 June 2021, the share of credit-impaired loans fell to 2.5% (31 December 2020: 2.6%); the share of loans in Stage 2 declined by 0.5 percentage points to 4.4%. In addition, repayments from written-off loans also increased compared to the previous year. These positive developments supported a significant decrease in loss allowance expenses by EUR 13.0 million to EUR 2.7 million compared to the same period of the previous year (H1 2020: EUR 15.7 million). The annualised cost of risk was 10 basis points (H1 2020: 64 basis points).

Net interest income stood at EUR 103.2 million, which was above the H1 2020 figure of EUR 99.9 million, primarily due to the strong business growth and stabilising margins in all banks of the ProCredit group. The net interest margin decreased slightly from the previous year by 0.1 percentage points to 2.8%, but increased by 0.2 percentage points from the first quarter of 2021. The increase in the net interest margin in the second quarter of 2021 supported a significant increase in net interest income of EUR 4.6 million or 8.5% compared to the first quarter. At EUR 24.1 million, net fee and commission income was above the level recorded in the previous year (H1 2020: EUR 22.6 million).

The scaling potential of the ProCredit group’s business model is further underscored by the stable cost structure paired with steady business growth. Personnel and administrative expenses increased only slightly by EUR 0.5 million to EUR 83.3 million in the first half of the year. Personnel costs increased by 2.2%, whereas administrative expenses declined slightly.

Management Board raises forecast for return on equity

As already communicated, based on the positive developments in the first half of the year and a still cautious but increasingly optimistic expectation for the second half of 2021, the Management Board raised its profit expectation for the 2021 financial year on 23 July 2021. A higher return on equity of between 8% and 9.5% (previously 6.0% – 7.5%) is expected for the 2021 financial year, with a significantly reduced cost of risk compared to the 2020 financial year, and a cost-income ratio of approximately 65%. The cost-income ratio would thus be at the lower end of the corridor of 65% – 68% forecast for 2021 in the 2020 Annual Report. Growth in the customer loan portfolio is still expected to be around 10%. This does not take into account significant currency effects.

Capitalisation remains comfortable

The Common Equity Tier 1 capital ratio (CET1 fully loaded) as of 30 June 2021 was 13.7%, and thus above the end-2020 level (31 December 2020: 13.3%). The consolidated result for the second half of 2020 has been recognised in Tier 1 capital; however, the result from the first half of 2021 has not. The result from the first half of 2021 will be recognised in Tier 1 capital as of the third quarter of 2021. The leverage ratio of 9.3% is well above the banking sector average.

The dividend payment of EUR 0.35 per share or EUR 20.6 million intended for the fourth quarter has already been deducted in full from Tier 1 capital.

Due to the improved financial results, the Management Board has also raised its forecast for the Common Equity Tier 1 capital ratio (CET1 fully loaded). Thus, the level is now expected to exceed 13% by the end of the 2021 financial year (previously around 13%).

Virtual Capital Markets Day for the ProCredit group on 12 October 2021

The first Capital Markets Day for the ProCredit group will be held on 12 October 2021 at 14:00 CEST. The event will be conducted virtually and is intended to provide interested analysts and investors with in-depth insights into the business model of the ProCredit group. Detailed information on the Capital Markets Day 2021 will be available on the ProCredit Holding website under Investor Relations in the coming weeks.

The ProCredit group’s interim group management report for H1 2021 is available 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. For additional information, visit:

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.