ProCredit Holding - Management expects ROE of c 10% in FY24

ProCredit Holding (PCB) posted a net profit of €27.2m in Q324 (down c 9% y o y), which represents an annualised return on equity (ROE) of 10.7% in the quarter. This is well within PCB's previous ROE guidance of 10-12% for FY24, with the year-on-year fall reflecting, primarily, the impact of PCB's investments as part of its updated strategy (see our previous outlook note for details). Management recently revised its FY24 ROE guidance to around 10%, mostly due to the temporary increase in the corporate income tax rate for Ukrainian banks from 25% to 50% in 2024 (which will have a high single-digit million euro negative impact on earnings), continued strong macroeconomic headwinds in Ecuador, as well as faster execution of some of its strategic investments and projects. Nevertheless, we remain confident in PCB's ability to achieve its medium-term goals to grow its loan book to more than €10bn and reach a medium-term ROE of 13-14%.

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