27.03.2018
ProCredit Holding AG & Co. KGaA DE0006223407
DGAP-News: ProCredit Holding AG & Co. KGaA: ProCredit group continues to grow in a successful fiscal 2017
DGAP-News: ProCredit Holding AG & Co. KGaA / Key word(s): Final Results
ProCredit Holding AG & Co. KGaA: ProCredit group continues to grow in a
successful fiscal 2017
27.03.2018 / 08:08
The issuer is solely responsible for the content of this announcement.
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ProCredit group continues to grow in a successful fiscal 2017
- The "Hausbank" principle for small and medium-sized enterprises (SMEs)
continues to bear fruit
- Overall customer loan portfolio growth rate of 8% in 2017 significantly
above previous year's level (2016: 2.4%)
- Customer loan portfolio in the core segment - loans over EUR 30,000 -
grows by 18% in 2017 (2016: 13%)
- Consolidated profit from continuing business operations, at EUR 46.6
million in 2017, nearly as high as previous year's figure (2016: EUR 47
million)
- At 7.1%, return on average equity (RoAE) in 2017 within the predicted
range (2016: 9.6%)
- In 2018, gross loan portfolio expected to grow by 12-15% and RoAE to
7.5-8.5%
ProCredit Holding AG & Co. KGaA (ProCredit Holding), the parent company of
the ProCredit group of banks, can look back on a successful fiscal 2017. The
success of the continued strategic focus on SMEs is particularly reflected
in strong lending growth of 18% in the core segment of business loans over
EUR 30,000 (2016: 13%).
The customer loan portfolio of the group, which has positioned itself as the
"Hausbank" for SMEs and operates primarily in South-Eastern and Eastern
Europe, grew by 8% during 2017, a significantly higher rate than in the
previous year (2016: 2.4%), despite being impacted by negative currency
effects. As at 31 December 2017, the total customer loan portfolio amounted
to EUR 3.9 billion (31 December 2016: EUR 3.6 billion). The main driver of
this growth was very positive development in the core customer business. The
ProCredit group's strategic focus is on SMEs with good development and
growth potential and whose financing needs are generally for loans ranging
from EUR 30,000 to EUR 3 million. In line with the raised forecast of July
2017, this core segment showed clear double-digit growth of 18% during the
year (2016: 13%), increasing to a total of EUR 3.4 billion (31 December
2016: EUR 2.9 billion). In the sub-segment of loans over EUR 50,000, the
ProCredit group even achieved portfolio growth of 22.9% during the year, and
as at 31 December 2017 this sub-segment accounted for 89.7% of the core
segment of loan volumes over EUR 30,000.
The growth of the loan portfolio was accompanied by a further improvement in
quality. The proportion of overdue loans (PAR 30) fell to 2.9% (2016: 3.9%).
As a result, provisioning expenses fell from EUR 18.6 million (31 December
2016) to EUR 5.3 million, while continuing to maintain an appropriate level
of risk coverage.
Strong growth in the banks in South Eastern and Eastern Europe
During the reporting period, the South Eastern Europe segment was able to
achieve EUR 224.2 million in loan portfolio growth to EUR 2.8 billion (31
December 2016: EUR 2.5 billion). In the core segment of loan volumes above
EUR 30,000, portfolio growth stood at 18.6%, significantly higher than the
previous year's rate (2016: 12.5%).
In the Eastern Europe segment, the loan portfolio grew by EUR 114.7 million
in 2017 to EUR 823.4 million (31 December 2016: EUR 708.7 million). In the
core segment of loans over EUR 30,000, growth of 21.4% was achieved in 2017,
improving on the 17.7% of the previous year. This successful business
development is attributable to the strong growth rates achieved by all
ProCredit banks in the South Eastern Europe segment as well as by the
Ukrainian bank.
The double-digit growth achieved in the South Eastern and Eastern Europe
regions in the core segment of loans with volumes of more than EUR 30,000
was primarily driven by the extremely successful implementation of the
ProCredit group's strategic focus on SMEs with strong development and growth
potential, and was also aided by a favourable investment climate.
The development of the ProCredit group's total customer loan portfolio in
the 2017 financial year was affected by the planned reduction of the
portfolio of very small loans below EUR 30,000. Overall, it was possible to
reduce this part of the portfolio by EUR 236.1 million during the reporting
period. By the end of 2017, this process had largely been completed in the
majority of our banks.
Strategic reorientation in South America continues
In South America, the strategic realignment and focus on SMEs with financing
needs of above EUR 30,000 is still ongoing and will be completed later than
in South Eastern and Eastern Europe. The customer loan portfolio in South
America saw a reduction of EUR 68 million during the reporting period to EUR
238.9 million (31 December 2016: EUR 306.9 million). This decrease was
mainly due to rapid progress in the withdrawal from loans below EUR 30,000
as well as to the depreciation of the US dollar. This development allows for
resources to be focused on the core client segment and sets a solid
framework for future portfolio growth.
In summary, as at 31 December 2017, the ProCredit group's customer loan
portfolio consisted mainly of business loans, which accounted for 89.6% of
the total. Loans to agricultural enterprises account for 20.3% of the total
loan portfolio. The "Green" loan portfolio, which comprises loans granted by
ProCredit banks specifically for environmentally responsible projects,
accounted for 12.6% of the total portfolio in fiscal year 2017. Loans to
private clients account for only a minor share of the portfolio. The great
majority of these are mortgages and smaller investment loans to purchase,
renovate or improve the energy efficiency of real estate. Consumer loans are
not a focal area for ProCredit and they constitute only a negligible share
of the portfolio.
The loan portfolio of the ProCredit group continues to be highly
diversified. The ten largest exposures represented only 1.4% of the group's
total customer loan portfolio as at 31 December 2017.
Consolidated result stable despite extraordinary expenses
The ProCredit group recorded a consolidated profit of EUR 48.1 million in
2017, which was lower than that of the previous year (2016: EUR 61 million).
This decrease in profit was due to the lower profit from discontinued
operations. Profit from continuing operations amounted to EUR 46.6 million,
similar to the previous year (2016: EUR 47 million).
Return on average equity (RoAE) at the end of the year was 7.1% (2016:
9.6%), thus lying within the forecast range of 7% to 9% for 2017. Lower net
interest income and extraordinary expenses due to the restructuring of the
branch network were offset by lower risk provisioning expenses and lower
operating expenses.
Borislav Kostadinov, Member of the Management of ProCredit Holding, said:
"We are satisfied that, at EUR 46.6 million in 2017, net income from
continuing operations was almost on a par with the previous year's level. We
achieved this result despite the extraordinary expenses connected with the
significant reduction of our branch and 24/7 Zone network, and the
investments in the launch of a group-wide uniform range of 'Direct Banking'
facilities. We expect these to contribute to even greater process efficiency
in the coming years and support the targeted acquisition of new private
individual clients."
Equity base very sound
The ProCredit group's equity base was further strengthened by the successful
completion of the announced sales of the banks in Nicaragua and El Salvador
in August and November 2017, respectively. The Common Equity Tier 1 capital
ratio (CET1 fully loaded) was 13.7% as at 31 December 2017 (2016: 12.5%), in
line with the forecast level of over 13%.
Increases in growth and profitability expected in fiscal year 2018
In 2018, the gross loan portfolio is forecast to grow by 12 - 15%, assuming
positive overall economic developments and no severe exchange rate
fluctuations. This growth is expected to be achieved primarily in loans
above EUR 50,000. Lending in the area of "Green Finance" is to be expanded
and the share of "Green" loans will increase to over 15% of the gross loan
portfolio.
The cost-income ratio is expected to improve further in fiscal year 2018,
falling below 70%. Depending on the development of the net interest margin
and loan portfolio growth, a return on average equity (RoAE) of 7.5% to 8.5%
is expected for the current fiscal year 2018.
It is projected that the Common Equity Tier 1 capital ratio (CET1) will be
over 13%.
Borislav Kostadinov concluded by adding: "We can look back with satisfaction
on the 2017 fiscal year, as we achieved our earnings and growth targets,
completed important strategic measures such as the withdrawal from Central
America, and successfully developed our private customer strategy with the
roll-out of our new range of digital services as planned. We intend to
accelerate our growth this year. In the markets where we operate, our banks
have earned an excellent reputation as banks for SMEs with good development
prospects. We anticipate favourable conditions for their economic growth
over the current year. With the funds raised from the successful capital
increase at the beginning of this year, we are well positioned to take
advantage of the opportunity to stand by our customers and foster the
further growth of the ProCredit group."
The ProCredit Holding Annual Report for 2017, available in the German and
English languages, as well as the 2017 Disclosure Report, available in the
German language, are accessible as of today on the ProCredit Holding website
at
https://www.procredit-holding.com/investor-relations/reports-and-publications/financial-reports/
Contact:
Andrea Kaufmann, Group Communications, ProCredit Holding,
Tel.: +49 69 951 437 138, e-mail: [email protected]
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 banks for small and medium enterprises (SMEs) and whose operational focus
is on South-Eastern and Eastern Europe. In addition to this regional focus,
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
(comprising the investment vehicles 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 www.procredit-holding.com.
Forward-looking statements
This report contains forward-looking statements. Forward-looking statements
are statements that do not describe past events; they include statements on
the assumptions and expectations of ProCredit Holding as well as underlying
assumptions. These statements are based on the plans, estimates and
forecasts currently available to the Management of ProCredit Holding.
Forward-looking statements therefore pertain solely to the date on which
they are made. ProCredit Holding undertakes no obligation to update these
statements in the event of new information or future events. Forward-looking
statements naturally involve risks and uncertainties. A number of important
factors can contribute to the fact that actual results may differ materially
from forward-looking statements. These factors could include major
disruptions in the Eurozone, a significant change in foreign trade or
monetary policy, a worsening of the interest rate margin or pronounced
exchange rate fluctuations. Should any of these factors arise, the impact
could be manifested in decreased loan portfolio growth and an increase in
past-due loans, and thus result in lower profitability.
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The issuer is solely responsible for the content of this announcement.
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Language: English
Company: ProCredit Holding AG & Co. KGaA
Rohmerplatz 33-37
60486 Frankfurt am Main
Germany
Phone: +49-69-951437-0
Fax: +49-69-951437-168
E-mail: [email protected]
Internet: www.procredit-holding.com
ISIN: DE0006223407
WKN: 622340
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated
Unofficial Market in Dusseldorf, Stuttgart, Tradegate
Exchange
End of News DGAP News Service
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