ProCredit holds virtual Capital Markets Day: Sustainability, scaling potential and profitability of the business model as focus of Management Board presentations

• Market position as a reliable bank for SMEs in Eastern and South Eastern Europe, with targeted promotion of environmentally sound investments as well as sustainable and impact-oriented banking practices
• Medium-term return on equity target of approximately 10% within reach; additional scaling effects expected to consolidate profitability further
• Management Board highlights competitive advantages and scaling potential; Management of ProCredit Bank Bulgaria presents local insights

Yesterday, ProCredit Holding held its first virtual Capital Markets Day for investors and analysts. All members of the ProCredit Holding Management Board gave presentations and answered questions from participants. Across all topics, the presentations highlighted how a responsible approach to business is an integral part of ProCredit’s business model and a key factor in its success. The ProCredit group aims to be the leading bank for SMEs in its core markets in Eastern and South Eastern Europe. In this way, ProCredit strives to generate sustainable and attractive returns for its investors over the long term, while at the same time making a positive impact on the development of local economies and societies.

The presentations specifically focused on the group’s strategy and business model, the unique aspects of its approach to credit risk, the strong group-wide focus on employee recruitment and training as well as the efficiencies gained from the comprehensive digitalisation measures.

The event was concluded with a presentation by the Management of ProCredit Bank Bulgaria. This illustrated the characteristics that distinguish the banks of the ProCredit group from most local competitors in Eastern and South Eastern Europe, highlighting the resulting strengths. For example, ProCredit Bank Bulgaria does not have a significant consumer loan portfolio, is a true direct bank for private individuals and has a significant portfolio of green loans.

Reliable SME partner even in times of crisis

ProCredit again lived up to its commitment to be a reliable partner for SMEs throughout the COVID-19 pandemic in 2020 and 2021. In an environment in which banking sectors largely stagnated, the ProCredit banks remained active in supporting their SME clients: For the year 2020 as a whole, this was reflected in loan portfolio growth of 9.5%, or approximately EUR 460 million, continuing in the first half of 2021 with a further increase of more than EUR 400 million, or 7.7%. Portfolio quality remained exceptionally stable.

Stringent credit risk management and strongly driven digitalisation as pillars of long-term profitability

The presentations highlighted how stringent credit risk management is firmly anchored in the ProCredit group’s business model and how it is reflected in credit default rates that are significantly below the level for the respective banking markets. The business focus on Eastern and South Eastern European markets, combined with the consistently conservative approach to credit risk, results in attractive interest margins with low and stable risk costs over the long term.

Another topic highlighted by the Management was the successful implementation of restructuring and digitalisation initiatives. In the course of the transition to comprehensive direct banking, in which the group’s own IT company, Quipu, played an important role, the ProCredit group successfully achieved a significant and targeted reduction of the branch network by almost 90% in recent years. Due to the focused digitalisation efforts of recent years, ProCredit banks today operate on the basis of a very lean structure, with systematically fewer employees and thus also lower operating expenses relative to portfolio size, compared to other banks in the market. According to the Management Board, the group’s scaling potential has not yet been exhausted, so the aim for the next few years is further business growth with largely stable costs.

Defined medium-term target of around 10% return on equity within reach

With a return on equity of 9.1% as of 30 June 2021, the Management Board believes that the medium-term target of 10% declared at the time of the stock exchange listing is now within reach. In the next two years, the Management Board expects further scaling effects to contribute to a steady improvement of the cost-income ratio and thus also further consolidate profitability.

Management presentations and recordings available online

For more detailed information, please find a recording of ProCredit Holding Management presentations and the presentations shown at the meeting on the ProCredit Holding website in the “Investor Relations” section under Capital Markets Day.

The next financial publication of the ProCredit group will be the Quarterly Financial Report for the third quarter of 2021 on 11 November 2021.

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 Eastern and South 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. Beyond the legal requirements, 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.