A law formally ratified by the Ukrainian President on 06 December 2023 that raises the profit tax rate for banks from 18% to 50% for 2023 and will prohibit banks from applying losses from previous years to the current year’s profit will have no impact on the group outlook for the 2023 financial year as of the current date. Also through this law a permanent increase of the tax rate on bank profits to 25% is to be implemented from 2024 onwards. Despite the financial impact of these changes on ProCredit Bank Ukraine, the Management Board confirms the FY 2023 and medium-term outlook for the ProCredit group.
ProCredit Bank Ukraine reported a result after tax of EUR 16.4 million for the first nine months of 2023. The implementation of this law will lead to increased tax expenses for ProCredit Bank Ukraine. For the first nine months of 2023, the additional tax expenses amount to approximately EUR 4.9 million. This includes the effect from the raised profit tax rate as well as the ban to apply losses from previous years to the current year’s profit.
Despite this additional tax expense, the Management Board of ProCredit confirms the group outlook for the financial year 2023, as more adverse conditions had already been assumed for the fourth quarter of the year – in particular to account for the ongoing war in Ukraine and the associated uncertainties. The expected return on equity for the entire year remains unchanged at around 12% (with a range of plus/minus 1 percentage point), based on an assumed cost of risk of up to 30 basis points. The cost-income ratio is expected at 60% – 62% and loan portfolio growth is anticipated in the low to mid-single-digit percentage range. The CET1 capital ratio (fully loaded) at year-end is expected to be over 13% and the leverage ratio around 9%. For the purpose of calculating the capital ratios, one-third of the interim profits for the financial year are set aside for a dividend payment in 2024.
In the medium-term, the return on equity is expected to be structurally at a level of around 12%, and the cost-income ratio (excluding non-recurring effects) at around 57%. At the same time, the customer loan portfolio of the group is expected to show an annual growth in the mid- to high-single-digit percentage range, with green loans accounting for 25% of the total portfolio. This unchanged medium-term outlook does not take into account any significant upside potential in Ukraine.
Andrea Kaufmann, Group Communications, ProCredit Holding, Tel.: +49 69 95 14 37 138,
About ProCredit Holding AG
ProCredit Holding AG, 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 main shareholders of ProCredit Holding AG include the strategic investors Zeitinger Invest GmbH and ProCredit Staff Invest GmbH & Co KG (the investment vehicle for ProCredit staff), KfW, the Dutch DOEN Participaties BV and the European Bank for Reconstruction and Development. As the group’s superordinated company according to the German Banking Act and as the parent financial holding company of the ProCredit financial holding group, ProCredit Holding AG 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: https://www.procredit-holding.com/