a profitable, development-oriented commercial banking group … · 2017-12-08 · a profitable,...
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A profitable, development-oriented commercial banking group for SMEs with a focus on Eastern Europe
German Equity Forum 2017 Presentation
1
ProCredit – A unique approach to banking
► “Hausbank” for SMEs
► Digital private client offer
► Headquartered in Frankfurt and supervised by BaFin
and Bundesbank
► Track record of high-quality loan portfolio
► Profitable every year since creation as a banking
group in 2003
► Listed on Frankfurt Stock Exchange
Customer loans€3.8bn
Q3’17 YTD loan
growth in core loan
category(4)
CET 1 ratio(3)
ProCredit
banks
13.3%
12.9% 13
17.5%
14.5%
13.8%11.0%
9.4%
33.8%
Germany
(ca. 2% of gross
loan portfolio)
South Eastern Europe and Eastern Europe
(ca. 91% of gross loan portfolio)
South America(1)
(ca. 6% of gross
loan portfolio)
Shareholder structure(2)
Notes: Footnotes on page 18 of this presentation
2
We deliver on our guidance
► Return on average equity (RoAE)
► Growth of the total gross loan portfolio(1)
► CET1 ratio (fully loaded)
► Dividend payout ratio
In the mid-term, and taking into consideration a stabilising political, economic and operating environment, we see potential for approx.
10% p.a. growth of the gross loan portfolio, a cost-income ratio (CIR) < 60%, and a return on average equity (RoAE) of approx. 10%.
► Growth of the gross loan portfolio in
the target loan categories (>EUR 30,000)(1) +13%
+6%
7.1% (annualised)
13.3%
n.a.
Continued strong growth in the
SME segment
Decrease of non-core loan categories
largely completed by end of 2017
Profitable third quarter with ROE of
7.4%
Positive impact from disposal of El
Salvador expected in Q4
Confirmation of dividend policy
> 10%
> 8%
7 – 9%
> 13%
1/3 of
profits
Outlook for ProCredit group 2017 Actuals
9M 2017CommentaryGuidance
2017
Notes: Footnotes on page 18 of this presentation
3
How ProCredit does business
True customer
focus as
“Hausbank” for
SMEs
Continuous
training of
employees
Prudent risk
management
Development
orientation
► >90% business
loans
4
True customer focus as “Hausbank” for SMEs
“I always feel that
ProCredit Bank is
there to support me.”
Construction materials producer - Georgia
► Simple loan and
deposit facilities
► Business Client
Advisers’ focus:
clients and risk
► Trustful long-term
relationships and true
understanding
of clients’ needs
and risks
Windows and doors producer - Romania Dairy farm - Albania
Producer of tool systems
for CNC machines - Bulgaria
Comprehensive service
as “Hausbank” for
SMEs
5
Continuous training of employees
ProCredit Entry Programme Continuous training International management
development
► Mandatory for all new recruits
► 6-month training programme
before final hiring
► Salary linked to training level
► “Up-or-out” in first two years,
long-term prospects thereafter
► ProCredit Management
Academy
► ProCredit Banker Academy
► Enables rapid diffusion of best practices
► Results in a closely-knit management network
► Integrates employees into a unique corporate culture
6
Prudent risk management
Diversified loan portfolio(1) Consistently low net write-offs(2)
0%
1%
2%
3%
4%
5%
2007 2010 2013 2016
Average net write-offs
Bulgaria19%
Serbia17%
Kosovo13%Macedonia
7%
Romania6%
Albania5%
Bosnia4%
Ukraine10%
Georgia8%
Moldova3%
Ecuador5%
Colombia1%
Mexico
Germany2%
South Eastern
Europe:
70%
Eastern Europe:
21%
South America:
6%
0.8%
Notes: Footnotes on page 18 of this presentation
7
Development orientation
Fostering entrepreneurs
and SMEs
Social responsibility Environmental responsibility
► Focus on SMEs as drivers of
economic growth and employment
in emerging countries
► Strong leverage in terms of job
generation and prosperity
► No focus on consumer lending
► No complex products
► Promotion of price and
banking sector transparency
► Rigorous approach regarding
AML and informal clients
► State-of-the-art standards to
minimise the environmental
impact of ProCredit’s lending
operations
► Focus on promotion of “green”
investments
► Strict exclusion lists
ISO 14 001
9.8%9.1%
7.8%
6.3%
4.3%
Bank 1 Bank 2 Bank 3 Bank 4 ProCredit
Non-performing loans in Eastern Europe 2016(1) Green loan portfolio in % total loans
3.0%4.0%
6.4%
9.1%
11.3%
Dec-13 Dec-14 Dec-15 Dec-16 Sep-17
Notes: Footnotes on page 18 of this presentation
8
Excellent positioning for profitable growth
Focused group
profile
Strong growth
dynamics
Above-sector
profitability and
stability
Modern network and
platform built for
scale
9
Key facts: Focused group profile on SMEs
Focused growth in SME loan categories(1)
Regional focus on South Eastern
Europe and Eastern Europe
Decrease in overall branch network
Decrease in number of cash
desk transactions
Decrease in number of total
group staff
Increase in loan portfolio per
total group staff
58%
81%87%
Dec-13 Dec-16 Sep-17
Loan portfolio > EUR 30k in % total loan portfolio
71%
89% 91%
Dec-13 Dec-16 Sep-17
SEE and EE as % of gross loan portfolio
31767 54
328
224102
Dec-13 Dec-16 Sep-17
Number of service points
Number of branches
645
156
291
28%
5%2%
Dec-13 Dec-16 Sep-17
YTD Cash desk transactions in % total transactions
11,514
4,078 3,522
Dec-13 Dec-16 Sep-17
Number of total group staff
363
890
1,088
Dec-13 Dec-16 Sep-17
Gross loan portfolio per total group staff
(in
EU
R k
)
Notes: Footnotes on page 18 of this presentation
Sep 2017 YTD
-25% (EUR -169m) 13% (EUR +377m) +6%
Initial loan size
(in EUR)
EUR 133m EUR 369m
FY 2016
-28% (EUR -256m) 13% (EUR +336m) +2%
Initial loan size
(in EUR)
EUR 185m EUR 486m
10
Strong volume growth in core loan categories
9M-
2017
FY
2016
Notes: Footnotes on page 18 of this presentation
Branches in selected
strategic locations
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Modern network and platform built for scale
► Modern network and customer experience
► Simple, unified offer for target private clients
► State-of-the-art IT systems developed by own IT
subsidiary
54
Service points, all equipped
with 24/7 self-service areas102
www.procreditbank-direct.com
9M-2017
12
Above-sector profitability and stability
► Strong track record of profitability
► > 9% average RoAE since 2005(4)
► Profitable every year since creation as a
banking group in 2003
► Significantly higher RoAE level and stability
compared to the sector
Group net income and RoAESEE segment RoAE vs sector
-5%
5%
15%
2013 2014 2015 2016
SEE banking sector RoAE ProCredit SEE segment RoAE(2) (3)
Net income(1) Group RoAE annualised(1)
Notes: Footnotes on page 18 of this presentation
Q&A
13
14
Appendix
15
Q3 2017 results at a glance
In EUR m Q2-2017 Q3-2017 9M-2016 9M-2017 y-o-y
Income
statement
Net interest income 51.3 50.4 175.6 153.0 -13%
Provision expenses 0.5 1.1 16.8 4.5 -73%
Net fee and commission income 10.9 11.7 32.1 33.3 4%
Net result of other operating income 0.5 2.8 1.5 5.3 n.m.
Operating income 62.2 63.8 192.3 187.1 -3%
Operating expenses 47.9 44.9 144.5 140.1 -3%
Operating results 14.3 18.9 47.9 47.0 -2%
Tax expenses 3.0 3.2 11.2 10.5 -6%
Profit from continuing operations 11.3 15.7 36.6 36.4 -1%
Profit from discontinued operations 0.4 -3.4 -1.1 -0.7 -41%
Profit of the period 11.7 12.2 35.5 35.8 1%
Key performance
indicators
Change in loan portfolio > EUR 30,000 4.7% 2.7% 7.7% 12.9% 5.1pp
Return on average equity(1) 6.9% 7.4% 7.6% 7.1% -0.5pp
CET1 ratio (fully loaded) 13.0% 13.3% 10.6% 13.3% 2.7pp
Additional
indicators
Net interest margin(1) 4.0% 3.9% 4.8% 3.9% -0.9pp
Net write-off ratio(1)(2) 0.1% 0.2% 0.6% 0.3% -0.3pp
Loans in PAR30 3.7% 3.5% 4.7% 3.5% -1.2pp
Impaired loans 5.8% 5.4% 7.7% 5.4% -2.3pp
Cost-income ratio 76.4% 69.3% 69.1% 73.1% 4.1pp
Book value per share 12.01 12.14 11.86 12.14 2%
Notes: Footnotes on page 18 of this presentation
16
Long-standing and well-interconnected
management teams at group and local level
16
► Credit risk management
► Investor relations
► Communications
► Environmental management
and impact reporting
32(1)
► Risk control
► Financial risk
► Operational risk
► AML
10
► Human resources
► IT
► Business support
► Compliance & legal
► Internal audit
34(1)
► Finance and
controlling
► Treasury and
funding
Experienced management collaborating at Holding and local level
Borislav Kostadinov Dr. Anja Lepp Sandrine Massiani Dr. Gabriel Schor
Local ProCredit banks(2)
Years of experience within ProCredit; Seat at supervisory board of local bank;
33 key management members On average 14 years of experience within ProCredit | 18 female/15 male
► Central training in Fürth
► English as lingua franca (> 50 courses p.a.)
► Regular specialist events and regional
meetings
Collective training…
► Strict common operating standards and
policy guidelines
► Strong, standardised MIS reporting
► Holding management with supervisory
board seats at local banks involved in
strategic business processes
► Common set of values
► Closely-knit network
► Rapid diffusion of best practices
…as catalyst for a shared vision and teamwork… …supported by clear framework
Notes: Footnotes on page 18 of this presentation
17
Key management
Key management of the ProCredit banks in South Eastern / Eastern Europe and South America
Colombia Ecuador
Ecuador Georgia Georgia Georgia Georgia Kosovo Kosovo Macedonia Macedonia Moldova
Moldova Romania Romania Serbia Serbia
Albania Albania BiH BiH BiH Bulgaria Bulgaria Bulgaria Bulgaria
Macedonia
Serbia Ukraine Ukraine Ukraine UkraineSerbia
South Eastern Europe Eastern Europe South America
► Average age: 39
► Average years with ProCredit: 14
► 29 ProCredit Management Academy graduates
► 18 female/15 male
Slide 1
(1) The South America segment also includes the institution
“Administración y Recuperación de Cartera Michoacán S. A” (ARDEC) in
Mexico, 0.2% of Group assets
(2) Shareholder structure according to the voting right notifications as
published on our website www.procredit-holding.com
(3) fully loaded
(4) Growth in loans > EUR 30,000
Slide 2:
(1) Adjusted guidance as of ad-hoc notification on 7 July 2017
Slide 6
(1) Loan portfolio by geographical segments in % of total loan portfolio
(EUR 3,832m as per 30-Sep-17); Excluding assets held for sale, as per 30-
Sep-17, Thessaloniki branch's loan portfolio part of ProCredit Bank Bulgaria
loan portfolio
(2) Net write-offs to gross loan portfolio ratio
Slide 7
(1) In % of total loans; Western banks’ NPL ratio as per RBI CEE Research
Report June 2017 based on aggregated data of CEE subsidiaries and
comprising individual banks’ CEE segment (Bank 1: Poland, Hungary,
Czech Republic, Slovakia, Bulgaria, Romania, Croatia, Albania, Serbia,
Bosnia and Herzegovina, Kosovo, Belarus, Russia, Ukraine. Bank 2:
Hungary, Czech Republic, Slovakia, Romania, Croatia, Serbia. Bank 3:
Poland, Hungary, Czech Republic, Slovakia, Slovenia, Bulgaria, Romania,
Croatia, Serbia, Bosnia and Herzegovina, Russia. Bank 4: Poland, Czech
Republic, Slovenia, Bulgaria, Romania, Croatia, Serbia, Russia); Data of
ProCredit includes SEE and EE segment, NPL ratio based on local
definition of ProCredit banks; Source: RBI CEE Research Report June
2017
Slide 10
Note: All related figures and ratios for Dec-13 relate to the subsidiaries as
shown in the consolidated financial statement as of 2013
(1) Loan portfolio > EUR 30k initial loan size in % of customer loan portfolio
by outstanding principal
Slide 9
Note: Loan volume growth split by initial loan size in all segments
Slide 12
(1) Excl. non-controlling interest
(2) Includes Romania, Bulgaria, Croatia, Serbia, Bosnia and Herzegovina
and Albania. Source: RBI CEE Research Report June 2017
(3) Includes Albania, Bosnia and Herzegovina, Bulgaria, Kosovo,
Macedonia, Romania and Serbia
(4) RoAE since 2005 and publicly available in “Bundesanzeiger”
Slide 15
Note: P&L-related figures and ratios, unless indicated otherwise, are based
on continuing operations; i.e. excluding Banco PyME Los Andes ProCredit
Bolivia, ProConfianza Mexico, Banco ProCredit El Salvador and Banco
ProCredit Nicaragua for 2017 and 2016; Return on average equity, CET1
ratio, and dividend payout ratio also include discontinued operations
(1) Annualised
(2) Net write-off ratio always presented YTD
Slide 16
(1) Including experience with Internationale Projekt Consult GmbH
(2) Data as at October 2017; Not including ProCredit Bank Germany
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Notes
19
Disclaimer
The material in this presentation and further supporting documents have
been prepared by ProCredit Holding AG & Co. KGaA, Frankfurt am
Main, Federal Republic of Germany (“ProCredit Holding”) and are
general background information about the ProCredit group’s activities
current as at the date of this presentation. This information is given in
summary form and does not purport to be complete. Information in this
presentation and further supporting documents, including forecast
financial information, should not be considered as advice or a
recommendation to investors or potential investors in relation to holding,
purchasing or selling securities or other financial products or instruments
and does not take into account your particular investment objectives,
financial situation or needs. Before acting on any information you should
consider the appropriateness of the information having regard to these
matters, any relevant offer document and in particular, you should seek
independent financial advice. All securities and financial product or
instrument transactions involve risks, which include (among others) the
risk of adverse or unanticipated market, financial or political
developments and, in international transactions, currency risk.
This presentation and further supporting documents may contain
forward-looking statements including statements regarding our intent,
belief or current expectations with respect to the ProCredit group’s
businesses and operations, market conditions, results of operation and
financial condition, capital adequacy, specific provisions and risk
management practices. Readers are cautioned not to place undue
reliance on these forward-looking statements. ProCredit Holding does
not undertake any obligation to publicly release the result of any
revisions to these forward-looking statements to reflect events or
circumstances after the date hereof to reflect the occurrence of
unanticipated events. While due care has been used in the preparation
of forecast information, actual results may vary in a materially positive or
negative manner. Forecasts and hypothetical examples are subject to
uncertainty and contingencies outside ProCredit Holding’s control. Past
performance is not a reliable indication of future performance.