ProCredit group reports positive half-year result; efficiency gains across the group balance substantial provisions for Ukrainian operations

• Result of EUR 7.7m or annualised RoE of 1.8% includes provisioning of EUR 57.3m mainly for Ukrainian loan portfolio
• Result excluding Ukrainian operations increased by more than 60% compared to H1 2021
• Cost-income ratio improved by 4.3 percentage points to 60.1% based on good increase in operating income by 24% on H1 2021
• Growth in loans of 6.2%, credit-impaired loans increased to 2.6% due to Ukrainian portfolio
• Prudent capital base with CET1 ratio (fully loaded) of 13.7% and leverage ratio of 9.7%
• Guidance for the financial year 2022 updated

The ProCredit group, which is mainly active in South Eastern and Eastern Europe, recorded a positive result of EUR 7.7 million in the first half-year of 2022, as a strong performance of most of its banks more than offset the high level of loan-loss provisions for the Ukrainian loan portfolio. A marked increase in operating income by 24% has been the major driver behind this and contributed to the strong reduction in the cost-income ratio by 4.3 percentage points to a level of 60.1%. The result of the group excluding the result contribution from ProCredit Bank Ukraine improved by EUR 16.3m or 64% to a level of EUR 42.0m or 9.5% annualised RoE, underlining the group’s regional diversification and resilience.

The loan portfolio increased by EUR 370 million or 6.2% (H1 2021: +EUR 402 million or 7.7%). Green loans contributed to 20% of this growth and surpassed the EUR 1.2 billion loan portfolio mark.

Deposits increased by EUR 200 million or 3.6% (H1 2021: +EUR 123 million or 2.5%), which was mainly driven by private individual clients.

Continued positive trends on income side; cost-income ratio at 60%

The group’s operating income increased by a strong EUR 30.9 million or 23.9% to a level of EUR 160.2 million (H1 2021: EUR 129.3 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 half-year of 2022. This strong performance outweighed the high level of provisions in Ukraine in H1 2022 in the light of continued Russian military aggression.

Net interest income increased by EUR 21.6 million or 20.9% to EUR 124.8 million (H1 2021: EUR 103.2 million). The net interest margin increased by 24 basis points against the previous year to a level of 3.0%, as lending margins showed broad stability and base rates increased in most of the group’s markets of operation.

At EUR 26.3 million, net fee and commission income was 9.0% above the previous year’s level (H1 2021: EUR 24.1 million). Income from the transaction and card business showed particularly positive trends. Net other operating income amounted to EUR 9.1 million (H1 2021: EUR 2.1 million).

Personnel and administrative expenses increased by EUR 13.0 million in the first half of 2022, while operating income rose by EUR 30.9 million. Driven by additional scaling effects and continued digitalisation, the cost-income ratio improved visibly by 4.3 percentage points to 60.1% (H1 2021: 64.4%) and was thereby close to the group’s medium-term target of below 60%. The increase in personnel and administrative expenses relates mainly to higher costs for personnel, IT, marketing and travelling.

Included in the half-year 2022 result is extraordinary income in the amount of EUR 3.2 million from derivative financial instruments and extraordinary expenses in the amount of EUR 4.6 million related to the war in Ukraine, mainly legal, advisory and audit fees, financial support for local staff and write-down of goodwill in Ukraine.

Strongly improved group performance without ProCredit Bank Ukraine

The group without ProCredit Bank Ukraine achieved a marked increase in net profit of EUR 16.3m with respect to the first half-year of 2021 to a level of EUR 42.0m (H1 2021: EUR 25.6m), corresponding to an annualised RoE of 9.5%. This exceeds the H1 2021 RoE of 9.1% including last year’s positive contribution of ProCredit Bank Ukraine. These continued improvements are mainly driven by steadily improving market positions, good loan growth and continued further operational improvements.

Increased level of provisions for loan portfolio in Ukraine, banking operations in the country broadly uninterrupted

Expenses for loss allowances increased above all due to the war in Ukraine by EUR 54.6 million to EUR 57.3 million, corresponding to an annualised cost of risk of 188 basis points (H1 2021: 10 basis points). Without the negative contribution of ProCredit Bank Ukraine, the cost of risk would have been 3 basis points. On group level, the share of credit-impaired loans amounted to 2.6%. The increase on the year-end 2021 level of 2.3% was driven by stage transfers within the Ukrainian portfolio.

ProCredit Bank Ukraine operations continue largely uninterrupted. It is thus benefiting from the already implemented digitalisation and centralisation of its processes. The bank’s capital and financial position remains sound.

Common Equity Tier 1 capital ratio comfortable at 13.7%, leverage ratio at 9.7%

The Common Equity Tier 1 capital ratio (CET1 fully loaded) as of the end of the first half-year of 2022 stood at 13.7% and the leverage ratio at 9.7%. The CET1 ratio increased by 30 basis points compared to the end of Q1 2022 (31 March 2022: 13.4%), above all reflecting the recognition of profits as of Q4 2021 and reversal of dividend accruals from 2021.

Management updates guidance for financial year 2022

Uncertainty remains high about the situation in Ukraine and the future development of the war. Against the backdrop of current events, management continues to expect the return on equity to decrease significantly compared with the previous year. Based on the strong efficiency improvements in the first half of the year, the cost-income ratio should improve to a level of 60-63% (2021: 64.4%). For the loan portfolio a growth rate in the high single-digit percent range is anticipated, after adjusting for currency effects. At year-end, the group’s capitalisation is expected to be at a solid level: around 13.0% for the CET1 ratio and 9.0% for the leverage ratio.

Given the continued, steadily improving performance of most ProCredit banks, management has a positive view on the group’s medium-term development. Despite the uncertainty surrounding further events in Ukraine the medium-term targets of a cost-income ratio below 60% and a return on equity of around 10% are confirmed. Management also expects the loan portfolio to show annual growth in the mid to upper single-digit percentage range.

The ProCredit group’s interim group management report for H1 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.