ProCredit Bank

ProCredit Bank

0800 000 10 Contact Centre

+373 22 27 07 07 for international calls



ProCredit group’s profitable growth continues in third quarter

  • Strong 8.5% increase in customer loan portfolio since the beginning of the year; customer deposits grow by 8.9%
  • Consolidated result of EUR 33.4 million corresponds to an annualised return on equity of 5.6% with stable operating expenses and a significant improvement in earnings before tax and cost of risk
  • Annualised cost of risk of 56 basis points, with non-performing loans stable at 2.3% and a 98.5% ratio of allowances to credit-impaired loans
  • Solid capital base with Common Equity Tier 1 ratio (CET1 fully loaded) of 14.1%
  • Decision on proposal for the appropriation of profit for the 2019 financial year


Frankfurt am Main, 12 November 2020 – The ProCredit group, which is mainly active in South Eastern and Eastern Europe, reported good business and financial results at the end of the third quarter, in the context of the challenges posed by the COVID-19 pandemic. In the first nine months of the financial year, the customer loan portfolio grew by 8.5% or EUR 408 million, which was slightly above the corresponding growth figure for the previous year (9M 2019: +8.3% / EUR +318 million). Growth in customer deposits was similarly strong at 8.9% or EUR 384 million. The consolidated result of EUR 33.4 million (9M 2019: EUR 44.0 million) was mainly characterised by an improvement in net interest income that was more than offset by higher expenses for loss allowances. The improvement in the cost-income ratio by 1.9 percentage points to 66.5% reflects a significant EUR 4.6 million rise in earnings before taxes and loss allowances to EUR 63.0 million.


The Management assesses these results as positive: “With our responsible banking approach, we aim to be a reliable partner for SMEs, especially in difficult times. Our staff and clients are adjusting remarkably well to the difficult conditions created by the pandemic. We have been able to further deepen our client relations, allowing us so far to manage portfolio quality well whilst at the same time successfully expanding business. We consider the 5.6% return on equity to be a solid result and are reassured that although credit risk costs are elevated this year, they have remained relatively low, given the challenging circumstances. Our results highlight a business model geared to sustainable financial performance and social impact.”


Growth in the customer loan portfolio was achieved primarily in the area of investment loans and in the green portfolio. The growth in investment loans since the beginning of the year amounted to EUR 187 million, or 8.1%. In the green portfolio, a strong increase of EUR 158 million, or 19.9%, has been recorded since the beginning of the year. Overall, the green loan portfolio contributed almost 40% to total growth and now accounts for an 18.3% share of the total portfolio.


The loan portfolio growth in the first nine months has been accompanied by a rise in customer deposits of EUR 384 million or 8.9%. The growth in deposits is due in particular to an increase in demand deposits. The group’s liquidity coverage ratio (LCR) as of 30 September 2020 stood at 149%.


The consolidated result of EUR 33.4 million was positively influenced by a significant improvement in net interest income and a slight reduction in operating expenses compared with the first nine months of the previous year, although this was more than offset by higher expenses for loss allowances. The strong portfolio growth more than compensated for a slight decline in the net interest margin since the beginning of the year by 0.2 percentage points to 2.9%, thus increasing net interest income by a total of EUR 7.1 million or 4.9% to EUR 150.7 million. The decline in the net interest margin is mainly due to the lowering of key interest rates in some of the ProCredit group’s markets. In the third quarter, however, a stable-to-positive trend in the net interest margin was observed by the majority of the ProCredit banks, and this contributed to an increase in net interest income compared with the second quarter. Measured against the previous quarter, the consolidated result improved significantly by EUR 3.7 million or 46% to EUR 11.7 million.


Expenses for loss allowances rose by EUR 18.7 million in the first nine months of 2020 to a total of EUR 21.1 million. This corresponds to an annualised cost of risk of 56 basis points. The expenses were mainly attributable to an increase in the loan portfolio in Stage 2 as well as the overall growth of the customer loan portfolio. In addition, the deterioration in the macroeconomic outlook, especially for 2020 and partly 2021, led to an increase in loss allowances for all three stages totalling approximately EUR 8 million. The share of non-performing loans dropped slightly to 2.3% (end-2019: 2.5%), and the ratio of allowances to credit-impaired loans rose from 89.1% to 98.5%.


Compared with the previous quarter, net fee and commission income rose in the third quarter by EUR 1.5 million to EUR 12.1 million, largely due to the recovery of domestic and international transfer volumes. In a year-on-year comparison, net fee and commission income for the first nine months was EUR 4.2 million down on the previous year at EUR 34.7 million.


Operating expenses have fallen by EUR 1.0 million since the start of the year to EUR 125.1 million, primarily due to a reduction in administrative expenses. The cost-income ratio continued to improve by almost 1.9 pp to 66.5%.


The capital adequacy of the ProCredit group remains healthy. The Common Equity Tier 1 capital ratio (CET1 fully loaded) as at 30 September 2020 was 14.1%, and thus unchanged since the end of 2019. Risk-weighted assets declined despite strong portfolio growth, partly due to the early introduction of new risk weights for SME exposures by the European Parliament in June 2020. Tier 1 capital includes the consolidated result for 2019 and the first half of 2020. In line with the dividend policy of ProCredit Holding, the capital ratios of the ProCredit group already take into account the deduction of dividends of one third of the consolidated result for 2019 and the first half of 2020. The comfortable capital base continues to be underpinned by a leverage ratio of 9.8% (31 December 2019: 10.8%).


After consultation with the Supervisory Board, the Management Board of ProCredit General Partner AG yesterday decided to propose to the virtual Extraordinary General Meeting of ProCredit Holding AG & Co. KGaA, which will take place on 10 December 2020, to carry forward the profit for the financial year 2019 (EUR 96,508,787.06) in full to new account.


The Supervisory Board has approved this decision, which is in line with the recommendations of the European Central Bank and the Federal Financial Supervisory Authority (BaFin) that banks should not pay any dividends before 1 January 2021.


In agreement with the Supervisory Board, the Management Board confirms its intention to submit a proposal to the Annual General Meeting of ProCredit Holding AG & Co. KGaA in 2021 for the appropriation of profit, which takes into account the absence of a dividend payment for the 2019 financial year and is in line with the current dividend policy of ProCredit Holding. This proposal will take into account the then prevailing recommendations of the supervisory authorities regarding dividend payments.


Until the time of this decision, EUR 17.7 million will continue to be deducted from the regulatory capital of the ProCredit group with regard to the 2019 financial year.


In view of the strong growth in the first nine months of 2020, the Management expects that the overall growth of the customer loan portfolio at the end of the year will be at the upper end of the forecast range of 8% to 10%. The return on equity for the year 2020 as a whole is still expected to be positive, although lower than in the previous year, while the cost of risk may be lower than the figure of approx. 75 basis points that was forecast in August. The cost-income ratio is expected to be slightly below the original forecast of approx. 70%. The CET1 capital ratio (fully loaded) at year-end is expected to be comfortable at over 13%. Major risk factors for this forecast are, on the one hand, the new wave of the pandemic that has swept across Europe since October 2020, the effects of which are not yet foreseeable, and on the other, the introduction of additional restrictions on domestic and international trade.



The quarterly report as of 30 September 2020 will be available in German and English on the ProCredit Holding website as of today in the Investor Relations section at





Andrea Kaufmann, Group Communications, ProCredit Holding, Tel.: +49 69 951 437 138, E-mail:


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. 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.