Introduction
ProCredit Holding (PCB) is a Germany-based group operating regional banks across Southeastern and Eastern Europe (SEE and EE), as well as in Ecuador, plus its holding and minor banking operations in Germany (it operates under a German banking licence; Exhibit 1). The company is focused on providing impact-oriented financing primarily to small and medium-sized enterprises (SMEs; 91% of the bank’s loan book at end-2022) to support investment and working capital needs throughout their lifecycles, with individual loan volumes mostly in the range of €50k to €1.5m. PCB’s lending activities support the real economy, with a significant share of agriculture, forestry and fishing (18% at end-March 2023) and local production (20%) in the loan portfolio (Exhibit 2). Management believes that innovative, transparent and tax-paying SMEs that embark on productivity-enhancing investments are critical to local economic development. Green loans represent a growing share of its loan book (20.2% at end-March 2023). Moreover, it is a direct bank for private clients with a proprietary digital platform and a lean branch network, targeting middle-income and high earners (including SME owners) in particular. Importantly, as ESG aspects are strongly embedded within PCB’s mission and strategy, it does not provide meaningful volumes of consumer loans.
PCB’s management highlights that the SME sector that PCB is focused on accounts for 70.9% of the total workforce and 62.1% of the value added (in terms of percentage of GDP) in the regions where PCB is present.
PCB is listed on the Frankfurt Stock Exchange, had total assets of €8.9bn at end-March 2023 and had a market cap of €444m as of 29 June 2023. We provide equity research reports on PCB, which are available on our website.
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