ProCredit Holding

ProCredit Holding (XETRA: PCZ)

Currency in EUR

Last close As at 26/01/2023

EUR5.22

▲ 0.18 (3.57%)

Market capitalisation

EUR297m

Overview
Price performance
Financials
Research
Sector insights
Thematics

ProCredit Holding is a Germany-based group operating regional banks across South Eastern and Eastern Europe and Ecuador. The banks focus on SMEs and private middle-income and high earners.

Russia’s invasion of Ukraine has introduced macroeconomic and geopolitical uncertainty in the region and the World Bank expects a 45.1% GDP contraction in Ukraine this year. However, it also expects 2–4% GDP growth in 2022 and 2023 for most countries where PCB is active. PCB’s in-depth, impact-oriented relationships with SME borrowers (92% of the loan book at end-June 2022), prudent credit risk management and solid capital base (CET-1 ratio of 13.7% at end-June 2022) should help it weather the near-term turmoil. Longer term, PCB’s business should be assisted by the low banking sector penetration in the region.

Latest Insights

Financials

18.11.22

ProCredit Holding — Operating income up 21% y-o-y in 9M22

Financials

17.08.22

ProCredit Holding — Annualised ROE ex-Ukraine of 9.5% in H122

Financials

01.07.22

ProCredit Holding — Long-term story remains intact despite the war

Financials

05.04.22

ProCredit Holding — Looking oversold at FY21 P/BV of 0.3x

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Sector

Financials

Equity Analyst

Milosz Papst

Director, Financials

Key Management

Dr Gabriel Schor

Management Board Member

Share Price Performance

Price Performance
%	1M	3M	12M
Actual	36.3	58.2	(24.6)
Relative	26.0	36.9	(24.4)
52 week high/low	€7.6/€2.6

Financials

ProCredit Holding (PCB) remains profitable despite further loss allowances in Ukraine, with Q322 annualised ROE of 4.4% (2.7% in the first nine months of FY22; 9M22) and 9M22 ROE excluding Ukraine at a solid 9.0% (versus 7.3% in 9M21). The strong 21% y-o-y growth in operating income in 9M22 to €246.6m (15.0% y-o-y in Q322) allowed PCB to absorb recent cost inflation (including high wage pressure and one-time expenses related to the war in Ukraine). As a result, the 9M22 cost-income ratio (CIR) was 60.7% versus 62.4% in 9M21. PCB still guides to an FY22 ROE substantially below the FY21 level of 9.7%, while expecting 10% in the medium term (which we consider achievable). Its shares are trading at a very undemanding P/BV FY22e ratio of 0.24x.