ProCredit Holding - Executing its updated strategy

ProCredit Holding (PCB) recorded strong sequential loan book growth of 3.8% in Q224 (and 6.9% in H124), a run-rate ahead of management's FY24 guidance of 10% (excluding FX). This was achieved at a stable year-on-year net interest margin of 3.6%, translating into a 12.8% y-o-y increase in net interest income to €90.5m in Q224. The execution of the company's updated strategy resulted in a 27.4% y-o-y increase in personnel and administrative expenses, leading to a cost-to-income ratio (CIR) of 66.3% (Q223: 59.7%). Moreover, PCB booked €5.4m in loss allowances (vs a net €1.3m release in Q223), which still represents a limited annualised cost of risk of 33bp (in line with PCB's FY24 guidance of up to 40bp). As a result, net income declined 30.5% y-o-y in Q224, with a return on equity (RoE) of 9.5% (H124: 11.6%), compared to management's FY24 guidance of 10-12%.

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