DGAP-News: ProCredit Holding AG & Co. KGaA
/ Key word(s): Half Year Results/Half Year Report
ProCredit group: significant improvement in result for first half of 2021 with continued strong growth
- Growth in customer loans by 7.7% and in customer deposits by 2.5%
- Increase in profit after tax by 68%; consolidated result of EUR 36.4 million represents return on equity of 9.1%
- Decrease in provision expenses leads to annualised cost of risk of 10 basis points, with improvement in portfolio quality
- Increase in net interest income results in significant improvement of cost-income ratio to 64.4%
- As communicated in July, Management Board raises forecast for return on equity for 2021 to 8.0% - 9.5%
- First Capital Markets Day to be held virtually on 12 October 2021
The ProCredit group's portfolio growth of EUR 402 million or 7.7% significantly exceeded the already good growth figures from the previous year (H1 2020: EUR +255 million or 5.3%). All ProCredit banks recorded good growth rates of at least 4.5%. As of 30 June 2021, the green loan portfolio amounted to EUR 1.1 billion (31 December 2020: EUR 1.0 billion), representing 19.1% of the total portfolio. Financing in the renewable energies segment continued to develop particularly well.
Customer deposits also showed good growth in the first half of 2021. The deposit growth of EUR 123 million or 2.5% was around the level recorded for the previous period (H1 2020: EUR +113 million, +2.6%). The increase in deposits was mainly in the area of sight deposits and savings deposits and can be attributed in particular to our direct banking business with private customers.
Low cost of risk and rising revenues drive improvement in result
The profit after tax of EUR 36.4 million represents a return on equity of 9.1%, a significant improvement over the previous year (H1 2020: EUR 21.7 million or 5.5%). The 68% increase in the result was due on the one hand to lower cost of risk and on the other to a EUR 5.0 million rise in operating income. The cost base was again largely stable, further improving the cost-income ratio to 64.4% (H1 2020: 66.5%).
Portfolio quality improved slightly over the first half of 2021 compared to year-end 2020. As of 30 June 2021, the share of credit-impaired loans fell to 2.5% (31 December 2020: 2.6%); the share of loans in Stage 2 declined by 0.5 percentage points to 4.4%. In addition, repayments from written-off loans also increased compared to the previous year. These positive developments supported a significant decrease in loss allowance expenses by EUR 13.0 million to EUR 2.7 million compared to the same period of the previous year (H1 2020: EUR 15.7 million). The annualised cost of risk was 10 basis points (H1 2020: 64 basis points).
Net interest income stood at EUR 103.2 million, which was above the H1 2020 figure of EUR 99.9 million, primarily due to the strong business growth and stabilising margins in all banks of the ProCredit group. The net interest margin decreased slightly from the previous year by 0.1 percentage points to 2.8%, but increased by 0.2 percentage points from the first quarter of 2021. The increase in the net interest margin in the second quarter of 2021 supported a significant increase in net interest income of EUR 4.6 million or 8.5% compared to the first quarter. At EUR 24.1 million, net fee and commission income was above the level recorded in the previous year (H1 2020: EUR 22.6 million).
The scaling potential of the ProCredit group's business model is further underscored by the stable cost structure paired with steady business growth. Personnel and administrative expenses increased only slightly by EUR 0.5 million to EUR 83.3 million in the first half of the year. Personnel costs increased by 2.2%, whereas administrative expenses declined slightly.
As already communicated, based on the positive developments in the first half of the year and a still cautious but increasingly optimistic expectation for the second half of 2021, the Management Board raised its profit expectation for the 2021 financial year on 23 July 2021. A higher return on equity of between 8% and 9.5% (previously 6.0% - 7.5%) is expected for the 2021 financial year, with a significantly reduced cost of risk compared to the 2020 financial year, and a cost-income ratio of approximately 65%. The cost-income ratio would thus be at the lower end of the corridor of 65% - 68% forecast for 2021 in the 2020 Annual Report. Growth in the customer loan portfolio is still expected to be around 10%. This does not take into account significant currency effects.
Capitalisation remains comfortable
The dividend payment of EUR 0.35 per share or EUR 20.6 million intended for the fourth quarter has already been deducted in full from Tier 1 capital.
Due to the improved financial results, the Management Board has also raised its forecast for the Common Equity Tier 1 capital ratio (CET1 fully loaded). Thus, the level is now expected to exceed 13% by the end of the 2021 financial year (previously around 13%).
Virtual Capital Markets Day for the ProCredit group on 12 October 2021
The ProCredit group's interim group management report for H1 2021 is available as of today on the ProCredit Holding website under Investor Relations at https://www.procredit-holding.com/en/investor-relations/reports-publications/financial-reports/
About ProCredit Holding AG & Co. KGaA
12.08.2021 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
|Company:||ProCredit Holding AG & Co. KGaA|
|60486 Frankfurt am Main|
|Listed:||Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Dusseldorf, Munich, Stuttgart, Tradegate Exchange|
|EQS News ID:||1225847|
|End of News||DGAP News Service|