ProCredit strengthens its market position with double-digit growth and achieves higher net profit in 2018

- Customer loan portfolio grows by 12.3% to EUR 4.4 billion in 2018, in line with expectations and significantly stronger than in the previous year (2017: 8.0%)

- Consolidated result for 2018 increases by 13.3% to EUR 54.5 million (2017: EUR 48.1 million)

- Implementation of direct banking concept contributes to a 13.9% increase in net fee and commission income to EUR 52.2 million (2017: EUR 45.8 million)

- Return on equity for 2018 increases within the forecasted range to 7.6%
(2017: 7.1%)

- Dividend of EUR 0.30 per share will be recommended at the next Annual General Meeting

Frankfurt am Main, 27 March 2019 - The ProCredit group, which includes its parent company ProCredit Holding and which is mainly active in South Eastern and Eastern Europe, once again recorded a successful financial year in 2018. The gross loan portfolio of the ProCredit group grew by 12.3% or EUR 482 million to EUR 4.4 billion in the reporting period (31 December 2017: EUR 3.9 billion; growth in 2017: 8% or EUR 281 million). The strong portfolio growth in 2018 underscores the successful positioning of ProCredit banks as Hausbanks for dynamic small and medium-sized enterprises (SMEs). The consolidated result improved by 13.3% to EUR 54.5 million in the past financial year (2017: EUR 48.1 million). The return on equity in 2018 stood at 7.6% (2017: 7.1%) and was thus within the forecast range of 7.5% to 8.5%. The increase of 0.5 percentage points over the previous year was achieved despite the significantly increased capital base. The ProCredit group has thereby achieved the acceleration in growth and increased profitability predicted for 2018.

The growth of the loan portfolio was accompanied by a further improvement in portfolio quality. The share of non-performing loans in the total loan portfolio fell in the course of 2018 from 4.5% as at 31 December 2017 to 3.1% as at 31 December 2018. The risk coverage ratio for non-performing loans rose to 90.8% as of the balance sheet date (31 December 2017: 84.6%).

Green loans, which the ProCredit banks provide to support environmentally responsible investments, showed a positive development with a growth rate of 38.5%, thus outpacing the growth of the total loan portfolio. As at 31 December 2018, green loans accounted for 15.4% of the overall loan portfolio (31 December 2017: 12.6%).

The direct banking concept for private clients was fully implemented at all ProCredit banks in 2018 and is viewed as a very positive development for clients and for the group, as it has enabled significant cost savings. Furthermore, this development has helped to increase the net fee and commission income by 13.9% or EUR 6.4 million to EUR 52.2 million, which now represents 21% of total operating income. In 2018, the ProCredit group raised its deposit volume by EUR 255 million to EUR 3.8 billion, despite having streamlined its branch network.

The cost/income ratio improved by 3.4 percentage points in the financial year, falling to 70.2% from 73.6%in 2017. Compared to the same period in the previous year, staff and administrative expenses decreased by 8.0%, or EUR 14.9 million, to EUR 171.4 million.

The Common Equity Tier 1 capital ratio (CET1 fully loaded) increased from 13.7% as at end-2017 to 14.4% as at 31 December 2018, thus exceeding 13% as expected. ProCredit Holding's successful capital increase carried out in February 2018 had a significant influence on this ratio.

As in previous years, one third of the group profit is to be distributed to the shareholders. Therefore, a dividend payment of EUR 0.30 per share will be recommended at the Annual General Meeting on 17 May 2019.

With the expansion of its business with SMEs, the ProCredit group continues to focus on the development impact of its own activities. In terms of non-financial performance, the group makes a firm commitment to contribute to the UN Sustainable Development Goals (SDGs), as outlined in its comprehensive 2018 Impact Report published today. In the medium term, this includes increasing the share of green loans in the total loan portfolio to 20% and ensuring that the operations of the ProCredit group are CO₂-neutral. The ProCredit group also intends to invest in additional staff training in order to further strengthen its already high level of social and environmental responsibility as an essential pillar of responsible banking.

The gross loan portfolio is expected to grow by 10% to 13% during the 2019 financial year. In the same period, the cost/income ratio is anticipated to be below 70% and the consolidated profit is expected to be between EUR 48 million and EUR 55 million. It is expected that the Common Equity Tier 1 capital ratio (CET1 fully loaded) will continue to exceed 13%.

The ProCredit Holding Annual Report 2018, the non-financial Impact Report 2018 and the Disclosure Report 2018 are 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/

Contact:
Andrea Kaufmann, Group Communications, ProCredit Holding, Tel.: +49 69 951 437 138,
E-mail: [email protected]

About ProCredit Holding AG & Co. KGaA
ProCredit Holding AG & Co. KGaA, based in Frankfurt am Main, Germany, is the parent company of the development-oriented ProCredit group, which consists of commercial banks for small and medium enterprises (SMEs). 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 anchor shareholders of ProCredit Holding AG & Co. KGaA include the strategic investors Zeitinger Invest and ProCredit Staff Invest (the investment vehicle for ProCredit staff), the Dutch DOEN Participaties BV, KfW Development Bank and IFC (part of the World Bank Group). As the group's superordinated company according to the German Banking Act, ProCredit Holding AG & Co. KGaA is supervised on a consolidated level by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) and the German Bundesbank. Further information is available on our website: www.procredit-holding.com.

Forward-looking statements
This press release contains statements relating to our future business development and financial performance, as well as statements relating to future actions or developments affecting ProCredit Holding which may constitute forward-looking statements. Such statements are based on the management of ProCredit Holding's current expectations and specific assumptions, many of which are beyond the control of ProCredit Holding. They are therefore subject to a multitude of risks, uncertainties and factors. Should one or more of these risks or uncertainties materialise, or should underlying expectations or assumptions prove incorrect, then the actual results, performance and achievements (both negative and positive) of ProCredit Holding may differ significantly from those expressed or implied in the forward-looking statement. ProCredit Holding undertakes no obligation and does not intend to update these forward-looking statements or correct them in the event of developments differing from those expected.