EQS-News: ProCredit group in 2024 with record business growth and good financial performance

ProCredit group in 2024 with record business growth and good financial performance

 

• Loan growth of EUR 784 million the strongest in the group’s history; deposits grow by a record EUR 1.0 billion
• Group delivers on strategic priorities: loan growth primarily in lower-volume segments; strong growth of smaller banks; granular deposit growth from private clients
• Group result of EUR 104.3 million corresponds to RoE of 10.2%
• Strategic growth investments driving temporarily higher cost-income ratio of 68.1%
• Outlook for RoE in 2025 of around 10%; medium-term guidance with RoE of around 13-14% confirmed amid good progress in the group’s scaling strategy
• ProCredit Holding increases capital at ProCredit Bank Ukraine by EUR 20 million, with new investment insured under umbrella of German investment guarantee scheme, strengthening positioning for any upside scenario in the country
• Management Board intends to propose dividend of EUR 0.59 per share (1/3 of consolidated result) for FY 2024

 

Frankfurt am Main, 27 March 2025 – The German impact banking group ProCredit, which is mainly active in South Eastern and Eastern Europe, delivered strongly in all key areas of its updated business strategy that was presented at its Capital Markets Day a year ago. The group’s loan portfolio grew strongly by 12.6% in 2024, especially with micro and small enterprises as well as private clients. Deposits grew by 14.3%, mainly through private client deposits. Amid significant strategic investments in staff, IT, marketing and the branch network in support of the ambitious growth path ahead, the group recorded a result of EUR 104.3 million in 2024, which corresponds to a return on equity of 10.2%. Cost increases from these investments resulted in a temporarily higher cost-income ratio of 68.1%. For 2025, the Management Board expects further strong loan growth of around 12% and an RoE of around 10%. In view of the continued positive outlook for the group, the Management Board intends to propose a dividend of EUR 0.59 per share to the Annual General Meeting on 4 June 2025.

 

The group’s loan portfolio grew by a historical high of EUR 784 million or 12.6% (2023: EUR 119 million or 1.9%), even though loan portfolios in Ukraine and Ecuador were stagnant due to the specific challenges in those markets. Two thirds of the total growth came from smaller-volume exposures to micro and small enterprises as well as private clients. The Management Board sees substantial scaling potential in the group’s smaller banks in Albania, Bosnia & Herzegovina, Georgia, Moldova and Romania, and they showed particularly strong growth averaging 18%. As of December 2024, the group served approximately 75,000 enterprises, underlining its important role as a bank for micro, small and medium enterprises (MSMEs) in South Eastern and Eastern Europe. Deposits grew by a record EUR 1.0 billion or 14.3% (2023: EUR 965 million or 15.3%), to which private client deposits contributed approximately 50%.

 

Good profitability amid targeted investments for future scaling

 

The group’s operating income increased by EUR 31.8 million or 7.7% to EUR 444.3 million (2023: EUR 412.5 million). This positive development was driven by higher net interest income, net fee and commission income, and income from foreign exchange transactions.

 

Net interest income grew by EUR 21.0 million or 6.2% to EUR 358.2 million (2023: EUR 337.2 million), as positive effects from the strong loan growth were in part offset by higher interest expenses from term deposits as well as the group’s successful green bond placement. The net interest margin decreased by 14 basis points to 3.5%.

 

At EUR 59.2 million, net fee and commission income was 2.9% above the level recorded in the previous year (2023: EUR 57.5 million). Income from transactions developed particularly positively. Net other operating income contributed EUR 26.9 million (2023: EUR 17.8 million) to the overall result. The result from foreign exchange transactions, which is included in this line item, showed a good increase of EUR 3.9 million or 14.0%.

 

Personnel and administrative expenses grew by EUR 55.8 million or 22.6%. This increase was mainly due to higher costs for staff, IT and marketing, as the group is building a sustainable foundation for its growth ambitions. Staff numbers increased in 2024 by 738 to 4,689 across all entities, in particular in business functions. Moreover, six new branches and 41 new service points were opened in order to broaden the group’s presence in its markets. The cost-income ratio increased as a result of these investments by 8.3 percentage points to 68.1% (2023: 59.9%).

 

In contrast to increased result contributions from most ProCredit banks in South Eastern and Eastern Europe, the extraordinary bank tax in Ukraine and underperforming business operations in Ecuador contributed negatively to the group result. In the last quarter of 2024, an additional approximately EUR 9 million in tax charges were booked for the bank in Ukraine as a result of the special bank tax. The bank in Ecuador recorded a loss of EUR 5.5 million in 2024 as the country experienced another challenging year, which was characterised by a severely deteriorated security situation, a prolonged drought and an energy crisis.

 

Strong portfolio quality supports low cost of risk

 

The share of defaulted loans decreased by 0.4 percentage points to 2.3% (2023: 2.7%), mainly due to continued improvements in the Ukrainian loan portfolio. Loss allowances showed a net release for the year of EUR -5.2 million (2023: EUR 15.5 million), which corresponds to a cost of risk of -8 basis points (2023: 25 basis points). This development was mainly driven by strong recoveries from written-off loans in the amount of EUR 12.6 million and a reduction in management overlays by EUR 2.5 million.

 

Management Board announces outlook for FY 2025 and confirms medium-term ambitions

 

In 2025, the Management Board expects to continue scaling business operations and to grow the loan portfolio by around 12%. As investments in growth catalysts are expected to remain high, particularly in the first half year 2025, the Management Board expects the cost-income ratio to remain elevated around the level recorded for 2024 and the return on equity at around 10%. The CET1 capital ratio is expected to be at a comfortable level of around 13% at year-end 2025.

 

In light of the good progress in all key strategic areas and the strong growth dynamics in line with the group’s scaling strategy, the Management Board confirms the medium-term outlook of a return on equity of around 13% -14% and a cost-income ratio of around 57%. In this outlook, the contribution of ProCredit Bank Ukraine to return on equity is largely neutral. The end of the war and subsequent reconstruction effort by the Western community could provide an additional upside potential of around 1.5 percentage points to this guidance for return on equity.

 

In December 2024, ProCredit Holding increased the capital of ProCredit Bank Ukraine by EUR 20 million by way of converting its remaining subordinated loan agreement with the bank into equity. The new investment is insured under the umbrella of German investment guarantee scheme from the Federal Government of Germany and increases the pro-forma CET1 buffer against requirements of the bank to more than 12 percentage points.

 

“In 2024, the year we launched our ambitious scaling strategy, our banks were able to deliver immediately on all areas of strategic priority: strong top-line growth, with major contributions from smaller-volume exposures and visible advances in our retail business – all amid continued good levels of profitability. Given these developments, we feel reassured in the strategic direction the group has taken and are more optimistic than ever about our medium-term targets.

 

We are thankful to our stakeholders for the continued support, and this year particularly to the German Federal Government for the investment guarantee and the faith they placed in our Ukrainian bank. We are pleased with the strong signal that this investment in our bank in Ukraine sends and we look forward to continuing and strengthening our support for Ukrainian MSMEs”, Hubert Spechtenhauser, Chairman of the Management Board Pro Credit Holding AG, commented.

 

Management Board intends to propose dividend of EUR 0.59 per share

 

As of December 2024, the group’s CET1 ratio amounted to 13.1% and the total capital ratio to 16.1%. Profits for H1 2024 were recognised in regulatory capital, net of the 1/3 dividend accrual for this period. The pro-forma CET1 ratio, including profits for H2 2024 net of the 1/3 dividend accrual for this period, would amount to 13.5%.

 

In view of the continued positive outlook for the group, the Management Board intends to propose to the Annual General Meeting on 4 June 2025 a dividend of EUR 0.59 per share, which corresponds to a payout of 1/3 of the FY 2024 consolidated result, in line with the group’s dividend policy.

 

The ProCredit group’s 2024 Annual Report is available as of today in the Investor Relations section of the ProCredit Holding website at https://www.procredit-holding.com/investor-relations/reports-and-publications/financial-reports/ . In line with the principles of the International Integrated Reporting Framework, the group discloses in its Annual Report its strategies, plans and methodologies in the context of the following topic-specific sustainability standards: ESRS E1 “Climate change”, ESRS S1 “Own workforce”, ESRS S4 “Consumers and end-users” and ESRS G1 “Business conduct”. The 2024 Impact Report Package will be published on 20 May 2025.

 

FY 2024 results at a glance

in EUR m
Statement of financial position	31.12.2024	31.12.2023	Change
Loan portfolio	7,010.0	6,226.5	783.5
Deposits	8,291.4	7,254.2	1,037.1

 

Statement of profit or loss	1.1.-31.12.2024	1.1.-31.12.2023	Change
Net interest income	358.2	337.2	21.0
Net fee and commission income	59.2	57.5	1.6
Operating income	444.3	412.5	31.8
Personnel and administrative expenses	302.8	247.0	55.8
Loss allowance	-5.2	15.5	-20.7
Profit of the period	104.3	113.4	-9.1

 

Key performance indicators	1.1.-31.12.2024	1.1.-31.12.2023	Change
Change in loan portfolio	12.6%	1.9%	10.6 pp
Cost-income ratio	68.1%	59.9%	8.3 pp
Return on equity	10.2%	12.2%	-2.0 pp

 

	31.12.2024	31.12.2023	Change
CET1 ratio (fully loaded)	13.1%	14.3%	-1.2 pp

 

Additional indicators	31.12.2024	31.12.2023	Change
Deposits to loan portfolio	118.3%	116.5%	1.8 pp
Net interest margin	3.5%	3.6%	-0.1 pp
Cost of risk	-8 bp	25 bp	-33 bp
Share of defaulted loans	2.3%	2.7%	-0.4 pp
Stage 3 loans coverage ratio	49.9%	57.6%	-7.8 pp
Green loan portfolio (in EUR m)	1,354.6	1,268.3	6.8%

 

 

Contact:

Andrea Kaufmann, Group Communications, ProCredit Holding, Tel.: +49 69 95 14 37 138,
E-mail: Andrea.Kaufmann@procredit-group.com

About ProCredit Holding AG

ProCredit Holding AG, based in Frankfurt am Main, Germany, is the parent company of the development-oriented ProCredit group, which consists of commercial banks for micro, small and medium enterprises (MSMEs) as well as private individuals, fostering economic, ecological and social development. 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 main shareholders of ProCredit Holding AG include Zeitinger Invest GmbH, KfW, the Dutch DOEN Participaties BV, the European Bank for Reconstruction and Development and ProCredit Staff Invest GmbH & Co. KG. As the group’s superordinated company according to the German Banking Act and as the parent financial holding company of the ProCredit financial holding group, ProCredit Holding AG 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: https://www.procredit-holding.com/

 

Forward-looking statements

This press release contains statements relating to future business development and/or future financial performance and/or future actions and/or developments affecting ProCreditHolding (forward-looking statements). Such forward-looking statements are based on the Management of ProCredit Holding’s current expectations and specific assumptions, which are partly beyond the control of ProCreditHolding. The forward-looking statements are therefore subject to a multitude of uncertainties. Should one or more of these uncertainties materialise, or should underlying expectations or assumptions prove inapplicable, then the actual conditions (both negative and positive) may differ significantly from those expressed or implied in the forward-looking statement. Beyond mandatory legal requirements, ProCredit Holding does not undertake any obligation to update these forward-looking statements or to correct them.