ProCredit group achieves good business development and improves profitability at nearly all banks, although provisions for Ukrainian operations drive negative Q1 2022 result

• Result of EUR -1.7 million driven by EUR 35.3 million provisions for Ukrainian loan portfolio
• Underlying profitability in all other countries of operation further increased
• Growth in loans of 1.8%, portfolio quality remains strong with a low level of 2.3% credit impaired loans
• Cost-income ratio improves by 5.7 percentage points to 59.1% as operating income increases by 24% compared to Q1 2021
• Largest segment South Eastern Europe achieves significant increase in return on equity to 12.2%
• Prudent capital base with CET1 ratio (fully loaded) of 13.4% and leverage ratio of 9.2%

The ProCredit group, which is mainly active in South Eastern and Eastern Europe, recorded a loss of EUR 1.7 million in the first quarter of 2022, as loan-loss provisions for the Ukrainian loan portfolio offset an otherwise strong performance by the remaining ProCredit banks. Thanks to a marked increase in operating income, the cost-income-ratio improved by 5.7 percentage points to a level of 59.1%. The return on equity of the group’s largest segment, South Eastern Europe, increased significantly to 12.2%, further underlying the ProCredit group’s strong regional diversification and strengthening its resilience to adverse developments.

The loan portfolio increased by EUR 105 million or 1.8% (Q1 2021: +EUR 158 million or 3.0%). Adjusted for currency effects, the growth rate was broadly the same as in Q1 2021. Green loans contributed to more than 20% of this growth.

Deposits decreased mildly by EUR 25 million or 0.4% (Q1 2021: +EUR 123 million or 2.5%). Whilst the development of deposits from private individual clients was positive, business client deposits dropped seasonally after the strong increase of EUR 270 million in Q4 2021.

Further improved underlying profitability and a cost-income ratio below 60%

The group’s operating income increased by a strong EUR 14.8 million or 23.6% to a level of EUR 77.7 million (Q1 2021: EUR 62.8 million) on the back of higher net interest income, higher net fee income and higher other operating income. Apart from ProCredit Bank Ukraine, all ProCredit banks recorded a positive result in the first quarter, and almost all displayed a marked increase in profitability and cost efficiency against the first quarter of the previous year. These encouraging developments were outweighed by a significant increase in provisions resulting from higher expected credit losses in Ukraine in the light of Russian military aggression.

Net interest income increased by EUR 10.9 million or 22.1% to EUR 60.2 million (Q1 2021: EUR 49.3 million). All ProCredit banks contributed to this increase. The net interest margin increased by 28 basis points against the previous year to a level of 2.9%, as lending margins stabilised and base rates increased in some of the group’s markets of operation.

At EUR 12.6 million, net fee and commission income was 5.5% above the previous year’s level (Q1 2021: EUR 12.0 million). Income from the transaction and card business showed particularly positive trends.

Personnel and administrative expenses increased by EUR 5.2 million in the first quarter of 2022, while operating income rose by EUR 14.8 million. Driven by additional scaling effects and continued digitalisation, the cost-income ratio improved visibly by 5.7 percentage points to 59.1% (Q1 2021: 64.8%) and was thereby in line with the group’s medium-term target of below 60%.

Significant provisions for group’s loan portfolio in Ukraine, whilst maintaining broadly normal banking operations

Expenses for loss allowances increased above all due to the hostilities in Ukraine and a resulting increase in provisions by EUR 31.9 million to EUR 35.7 million. The additional provisions in Q1 2022 reflect the significant deterioration in the country’s macroeconomic outlook, which resulted in structurally higher expected credit losses for the entire Ukrainian loan portfolio. The annualised cost of risk of 238 basis points (Q1 2021: 27 basis points) significantly exceeds that of any period in the recent past. Without the negative contribution of ProCredit Bank Ukraine, the cost of risk would have been 1 basis point. Portfolio quality remained strong, with credit impaired loans at 2.3%, and thus stable with respect to year-end 2021.

Benefiting from the already implemented digitalisation and centralisation of its processes, ProCredit Bank Ukraine is continuing to operate without significant disruptions. The bank’s capital and financial position remains solid and everyday operationality is largely uninterrupted as the bank’s employees continue working from various locations inside and outside Ukraine. As hostilities are now more focused on the eastern part of the country, the bank has resumed its lending activities to existing clients and is thereby focusing particularly on providing much-needed funding to agricultural clients with operations outside the current conflict areas.

Profitability of the group’s largest segment, South Eastern Europe, improved significantly to achieve a double-digit return on equity

South Eastern Europe, as the largest regional segment of the ProCredit group, contributed 70% to the group’s loan portfolio and EUR 18.2 million of its net income in Q1 2022. The marked increase in net income of EUR 84% or EUR 8.3 million in Q1 2022 compared to Q1 2021 was mainly driven by strong market positions, good loan growth of 2.4%, and further operational improvements at all seven banks in this segment. Thanks to this, the return on equity increased significantly to 12.2% (Q1 2021: 7.1%), further underlying the ProCredit group’s strong regional diversification and reinforcing its resilience to adverse developments.

Common Equity Tier 1 capital ratio comfortable at 13.4%, leverage ratio at 9.2%

The Common Equity Tier 1 capital ratio (CET1 fully loaded) as of the end of the first quarter of 2022 stood at 13.4% and the leverage ratio at 9.2%. The CET1 ratio decreased by 70 basis points compared to the end-2021 level (31 December 2021: 14.1%), above all reflecting the effects of the deterioration in Ukraine’s sovereign rating. Taking into account the recognition of Q4 2021 profits as well as the reversal of 2021 dividend accruals, which will take effect after the adoption of the financial statements at the Annual General Meeting on 31 May 2022, the CET1 ratio would stand at 14.1%.

The ProCredit group’s quarterly financial report for Q1 2022 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. 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.