ProCredit in Q1 advances on its growth and transformation strategy with good financial result

ProCredit in Q1 advances on its growth and transformation strategy with good financial result

• Loan growth of EUR 174 million or 2.5%; good growth in all client segments and across South Eastern and Eastern Europe
• Group result of EUR 25.2 million corresponds to RoE of 9.5%
• Cost-income ratio at 70.8%; strategic investments in growth catalysts begin to level out
• Management Board proposes to AGM a dividend of EUR 0.59 per share for FY 2024
• ProCredit Holding promoted to German small cap index SDAX

Frankfurt am Main, 12 May 2025 – The German impact banking group ProCredit, which is mainly active in South Eastern and Eastern Europe, has continued its ambitious growth path in Q1 2025 while maintaining good levels of profitability. The group’s loan portfolio grew by 2.5% in Q1, especially with micro and small enterprises as well as private clients. Cost increases mostly related to strategic investments in growth and scaling initiatives executed in the previous year and resulted in a temporarily higher cost-income ratio of 70.8%. The net result for the first quarter, EUR 25.2 million, corresponds to a return on equity of 9.5%. To the AGM on 4 June 2025 the Management Board proposes inter alia a dividend of EUR 0.59 per share, which corresponds to 1/3 of the consolidated result for 2024. Effective as of 9 May 2025, ProCredit Holding has been included in the selection index for German small caps SDAX.

The group’s loan portfolio grew in the first quarter of 2025 by EUR 174 million or 2.5% (Q1-2024: EUR 187 million or 3.0%) across all client segments and particularly strongly in some of the group’s smaller banks. Adjusted for currency effects, the group’s loan portfolio grew by 3.2%. More than 70% of the total growth came from smaller-volume exposures to micro and small enterprises as well as private clients, in line with the group’s business strategy. Deposits declined slightly, by EUR 55 million or 0.7%, mainly due to seasonal outflows from business accounts. Deposits from private individuals grew by a strong EUR 79.5 million or 2.2%.

Good profitability with targeted growth investments starting to level out

The group achieved a good return on equity of 9.5%, in line with expectations (Q1-2024: 13.4%) and in spite of higher personnel and administrative expenses, which increased primarily due to last year’s strategic investments in growth catalysts. Operating income remained broadly on the level of the previous year at EUR 105.6 million (Q1-2024: EUR 107.2 million), while the cost-income ratio rose to 70.8% (Q1-2024: 61.7%) as a consequence of these dynamics.

Net interest income decreased by EUR 5.1 million to EUR 85.0 million (Q1-2024: EUR 90.1 million), as positive effects from strong loan growth were more than offset by negative pricing effects from lower policy rates as well as higher interest expenses. The net interest margin amounted to 3.2%, down by 49 basis points from 3.7% one year ago.

At EUR 22.6 million, net fee and commission income was EUR 1.5 million or 7.2% above the previous year’s period (Q1-2024: EUR 21.0 million), mainly due to strong development of income from transactions and foreign exchange business. Net other operating income contributed EUR -1.9 million (Q1-2024: EUR -3.9 million) to the overall result.

Personnel and administrative expenses grew by EUR 8.6 million or 13.0%. 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. Whereas staff numbers increased by over 700 or 19% in 2024 across all entities, the figure has remained broadly stable since the beginning of the year. Similarly, the number of branches and service points increased by 47 in 2024 and only slightly further in Q1 2025, demonstrating that the strategic growth investments, which were a major cost driver in 2024, are starting to level out.

The positive operational and financial development of the group in Q1 2025 was supported by the group’s regional segments South Eastern Europe and Eastern Europe. As in the previous year, the group’s business operations in Ecuador contributed negatively to the group result. The return on equity for the group, excluding its regional segment South America, amounted to 10.4%.

Strong portfolio quality supports low cost of risk

The share of defaulted loans remained stable at the low level of 2.2% (Q4-2024: 2.3%). Loss allowances showed a net release of EUR 0.8 million (Q1-2024: EUR 0.3 million loss allowance), which corresponds to a cost of risk of -5 basis points (Q1-2024: 2 basis points). In addition to the group’s strong portfolio quality, this development was mainly supported by continued strong recoveries from written-off loans in the amount of EUR 2.9 million (Q1-2024: EUR 3.3 million).

“In Q1 2025 ProCredit continued the strategically important path we successfully navigated in 2024, the year we launched our ambitious growth and transformation strategy. We managed to achieve further top-line growth, well-supported by smaller-volume business exposures and growth in our business with private clients. At the same time, we are seeing the pace of investments in growth catalysts slow down in most areas on the back of the strong progress made during last year. One important exception is IT, where investment in developments and group-wide rollout is ongoing this year to further propel our business strategy and growth objectives.

As scale benefits will only gradually become visible over the next several quarters, and considering the continued headwind on margins from generally declining interest rates, we are pleased that we were able to maintain a good level of profitability this quarter in line with our expectations. On this basis, we very much feel reassured that the strategic direction the group has taken, inter alia investing in growth and balance sheet transformation to strengthen the group’s margins, will be effective in enabling attractive medium-term profitability in line with our guidance”, commented Hubert Spechtenhauser, Chairman of the Management Board of ProCredit Holding AG.

Management Board proposes dividend of EUR 0.59 for upcoming Annual General Meeting

At 13.1%, the group’s CET1 ratio remained stable compared to the year-end 2024 (Q4-2024: 13.1%). In line with the group’s policy to pay out one third of the consolidated result in dividends, the Management Board has proposed to the AGM scheduled for 4 June 2025 to distribute a dividend for FY 2024 in the amount of EUR 0.59 per share. This corresponds to a total payout of EUR 34.8 million.

The ProCredit group’s Quarterly Financial Report as of 31 March 2025 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. The financial calendar for ProCredit Holding is available at https://www.procredit-holding.com/investor-relations/financial-calendar.

Q1 2025 results at a glance

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.