EQS-News

ProCredit group finishes 2023 with a strong business and financial performance; RoE guidance achieved - Seite 3

 

Steady portfolio quality keeps cost of risk at good level, despite further additions to management overlays

 

The share of defaulted loans decreased by 0.6 percentage points to 2.7% (2022: 3.3%), mainly due to steady repayments and write-offs in Ukraine. In Ukraine, the share of defaulted loans decreased by 5.6 percentage points to 6.3% (2022: 11.9%). Excluding the good performance of the Ukrainian portfolio, this ratio also improved slightly by 0.1 percentage points to 2.3% (2022: 2.4%).

 

Cost of risk normalised at a level of 25 basis points after the pronounced impact of the war in Ukraine in the previous year (2022: 174 bps). Loss allowances in the amount of EUR 15.5 million (2022: EUR 104.6 million) were above all driven by additional management overlays in relation to the war in Ukraine and the continued high level of global political and macroeconomic uncertainty. The total amount of management overlays in the group’s loss allowances increased by EUR 22.3 million to EUR 62.0 million (2022: EUR 39.6 million).

 

Management Board announces outlook for FY 2024 and the medium-term

 

Against the backdrop of the strong financial performance in 2023, the Management Board expects a return on equity of around 10%-12% for 2024, which is based on a cautious estimate of up to 40 basis points for the cost of risk. The cost-income ratio is expected to be around 63%, which takes into account increased investments and assumes a slightly decreased net interest margin.

 

“We continue to invest strongly in the areas staff, IT and marketing, as we want to visibly increase our footprint in our markets in the coming years in order to achieve important scaling effects, strengthen margins on both sides of the balance sheet, and amplify the positive impact we seek to generate in the societies and economies in which we operate”, Hubert Spechtenhauser commented.

 

In the medium-term, ProCredit intends to achieve a group loan portfolio of over EUR 10 billion, a highly granular deposit base with a share of retail clients of approximately 50% and local deposit-to-loan ratios of around 120% at most banks. The medium-term return on equity is expected to increase to a level of approximately 13%-14%, assuming a cost of risk of around 30-35 basis points. The cost-income ratio is expected to be approximately 57% (without one-off effects).