ProCredit group finishes 2021 with a financial result above expectations, supporting management confidence in medium-term targets although the war in Ukraine limits ability for short-term forecast

• Increase in result of 92% to EUR 79.6 million despite challenging market environment; return on equity of 9.7% on level of medium-term target of approximately 10%
• Strong growth in loans of 12.8% and deposits of 13.1%
• Very solid capital base with CET1 ratio (fully loaded) of 14.1% and leverage ratio of 9.3%
• War in Ukraine leading to limited ability to forecast FY 2022 metrics; decision to propose to General Meeting to carry forward full amount of retained earnings for FY 2021
• Management reiterates the strategic benefits of the group’s long-term, impact-oriented business model and confirms the group’s medium-term targets

The ProCredit group, which is mainly active in South Eastern and Eastern Europe, exceeded expectations for the 2021 financial year despite the ongoing COVID-19 pandemic. The loan portfolio grew by EUR 670 million or 12.8%. This strong growth underscores the company’s positioning as a Hausbank and its expertise in green lending. Thanks to higher income, strong cost control and lower risk costs, the consolidated result increased by 92% to EUR 79.6 million. With a return on equity of 9.7%, the group exceeded its guidance for the financial year of 8.0 – 9.5% and achieved its medium-term target of approximately 10%. Despite the war in Ukraine, Management also reiterates that it continues to take a positive view of the group’s medium-term development in the current context, confirming the group’s medium-term targets.

The loan portfolio increased by a total of EUR 670 million or 12.8% (2020: +EUR 457 million or 9.5%). Adjusted for currency effects, growth was just over 10%, which is in line with our expectations. More than 20% of this growth came from green loans, in particular for financing related to renewable energies. The green loan portfolio increased by EUR 143.2 million to a total of EUR 1.1 billion. The share of the green loan portfolio in the total portfolio stood at 19%.

Deposits increased by EUR 643 million or 13.1% (2020: +EUR 566 million or 13.0%). Most of the growth came from sight and overnight deposits with low interest rates, serving to further improve the group’s refinancing structure and positively impacting the net interest margin.

Improved earnings situation, low risk expenses and further efficiency gains lift return on equity to approximately 10%

The consolidated net profit of EUR 79.6 million corresponds to a significantly improved return on equity of 9.7% compared with the previous year (2020: EUR 41.4 million or 5.3%). All banks contributed to the 92% increase in the consolidated result of the financial year, while the increase in profitability was particularly pronounced in the segment South Eastern Europe.

Net interest income increased by 10.2% to EUR 222.0 million in 2021 (2020: EUR 201.6 million). The net interest margin showed positive momentum during the year, increasing from 2.8% (Q4 2020) to 3.0% (Q4 2021).

At EUR 50.9 million, net fee and commission income was 7.3% above the previous year’s level (2020: EUR 47.4 million). Income from the transaction and card business showed particularly positive trends, with commission expenses rising, partly due to the steady utilisation of bank guarantees, from which the group benefits strongly.

Portfolio quality further improved in 2021, with a decreased share of credit-impaired loans 0.3 percentage points to 2.3%, while the share of loans in Stage 2 fell significantly by 1.3 percentage points to 3.6%. Against this backdrop, the expenses for loss allowances fell sharply to EUR 6.5 million compared to the same period of the previous year (2020: EUR 28.6 million), in part because the previous year’s expenses were strongly impacted by pandemic-related model effects and a worsened economic outlook. Cost of risk decreased to 12 basis points (2020: 57 basis points). These positive developments also illustrate that the SME clients of the ProCredit banks have succeeded well in adapting to the challenges of the COVID-19 pandemic and in ensuring the continuation of their business operations under these adverse conditions.

Personnel and administrative expenses increased by EUR 9.4 million in 2021, while operating income (before cost of risk) rose by EUR 29.8 million. The cost-income ratio thus decreased by 3.8 percentage points to 64.2% (2020: 68.0%), slightly better than the guidance of around 65%.

Common Equity Tier 1 capital ratio at a comfortable level of 14.1%

The Common Equity Tier 1 capital ratio (CET1 fully loaded) as of the end of 2021 stood at 14.1%, and thus 80 basis points above the end-2020 level (31 December 2020: 13.3%). This positive development was mainly due to the strong earnings development. The consolidated result for the fourth quarter of 2021 and 1/3 of the interim profits as of September 2021 (EUR 20.7m) have yet not been attributed to core capital. At 9.3%, the leverage ratio continues to be at a particularly high level compared to the overall banking sector.

Statement on the war in Ukraine and group implications

A primary group focus is on the employees in Ukraine and their families. In cooperation with employees of other ProCredit banks, ProCredit Holding is working to accommodate Ukrainian colleagues and their families at the ProCredit academies and training centres in Germany, North Macedonia and Serbia, and to deliver urgently needed medicine to Ukraine.

ProCredit bank Ukraine is continuing its operations in the country as well as possible, given the overall challenging environment. The bank’s capital and financial position remains solid, also in stress scenarios. Every-day operationality is largely uninterrupted. Employees of the bank are currently working from various locations inside and outside Ukraine and thereby have access to the bank’s systems. Essential databases of the bank are regularly backed-up by the group-internal software company, Quipu, on servers in Germany. As far as circumstances allow, business client advisers maintain close contact with borrowers and deposit customers via digital communication channels.

ProCredit Bank Ukraine has 328 employees and contributes approximately 13% of the group’s loan portfolio. As of 31 December 2021, the bank’s equity amounted to EUR 129.9 million. The bank contributed EUR 23.7m to group net income in FY 2021, representing a share of 27% before group functions.

The business activities of the ProCredit group are spread over a total of 12 banks, with majority of assets not directly affected by the war in Ukraine. ProCredit Holding has implemented risk management mechanisms that ensure the ability to assess and react to group-relevant risks that could arise from the situation in Ukraine and from additional sanctions. The sanctions against the Russian Federation have no significant direct impact on the ProCredit group. The number of ProCredit clients who rely on trade with the Russian Federation is very limited.

Due to the uncertainties related to the war in Ukraine, the ability to forecast key results metrics for the financial year 2022 is limited. In spite of the increased uncertainty also on a macroeconomic level, Management expects the loan portfolios of many ProCredit banks to continue to grow by around 10% in 2022, although the consolidated growth will likely be below the level of 2021. Management still sees particular growth potential in the energy efficiency and renewable energy sectors; the share of green loans is therefore expected to continue to grow. Because of the war in Ukraine, Management expects that return on equity will decrease significantly compared to the previous year, and that the cost-income ratio will increase noticeably. For the CET1 ratio and leverage ratio, management sees potential for a stronger decline in FY 2022 as compared to the strong level as of end 2021.

On 22 March 2022, Management published its decision to propose to the Annual General Meeting of Shareholders on 31 May 2022 to carry forward the full amount of the retained earnings of ProCredit Holding of the financial year 2021 (EUR 84.9 million).

Medium-term targets for the ProCredit group confirmed

Given the ProCredit group’s clearly focused business model, its close relationships with customers and conservative risk strategy, the management continues to view the group’s medium-term development positively and confirms the medium-term goals of 10% loan portfolio growth, a cost-income ratio below 60% and a return on equity ratio around 10%:

“The strong results achieved in 2021 give us confidence going forward.”, says ProCredit Management. “The war in Ukraine is tragic and certainly presents the ProCredit group with new challenges, particularly in the short-term. We feel well-placed to meet these challenges and achieve our mid-term targets. Strategically we are only reinforced in our commitment to support SMEs across South Eastern and Eastern Europe as the imperative for these regions to create prosperity in a way that fosters the green transition, transparency and international economic integration is clearer than ever.”

The ProCredit group’s Annual Report 2021 and the Impact Report 2021 are available as of today in the Investor Relations section of the ProCredit Holding website at As of the date of these publications, the company has replaced the discriminatory generic masculine in all German texts with other inclusive and gender-sensitive forms of language where legally permitted.

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. 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.