Q2 2020 results Frankfurt am Main, 13 August 2020 Agenda A - PowerPoint PPT Presentation

Dr Gabriel Schor, Member of the Management Board Christian Dagrosa, Manager Q2 2020 results Frankfurt am Main, 13 August 2020

Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix 1 ProCredit Group | Q2 2020 results | Frankfurt am Main, 13 August 2020

ProCredit in the current market environment Encouraging Q2 results against backdrop of challenging, but gradually steadying environment ► Good business growth: Strengthening market position while maintaining strict client selection criteria  Customer loans Q2 growth of 4.4% (YTD 5.3%), reflecting in particular demand for investment and green loans  Customer deposits Q2 growth of 4.2% (YTD 2.6%), achieved through growth in business and private client deposits ► Steady profit of the quarter of EUR 8.0m (YTD EUR 21.7m/RoE 5.5%), reflecting:  Net interest income up 3.6% vs Q2-19 (H1-20 up 7.8% YOY) with strong loan growth overcompensating slight decrease in margin  Increased cost of risk of 71 bps (YTD 67 bps) in line with expectations; update of macro assumptions as key driver  Further decreased operating expenses (down 3.1% relative to Q2-19), with cost-income ratio at 66.5% YTD Continued steady risk profile ► Credit risk profile developing steadily despite challenges arising from COVID-19 pandemic  Loan portfolio quality remains good with credit-impaired loans at 2.5% and steady coverage with good collateral  Continued individual review of client situations and differentiated approach to restructuring ► LCR at 142%, deposit-to-loan ratio at 88% ► Continued strong capital base: CET1 ratio at 14.1%, leverage ratio at 10.3% Guidance for full year 2020 confirmed, with guidance for loan growth increased to 8% – 10% 2 ProCredit Group | Q2 2020 results | Frankfurt am Main, 13 August 2020

ProCredit in the current market environment (continued) Focused and long-term-oriented business model of ProCredit continues to provide strong basis for managing prevailing challenging environment well ► Very efficient branch structure and digital approach to all routine banking transactions allows us to focus on core business  Update Q2: Strong new customer growth in Q2 as a result of focused staff activities and reduced activities of competitor banks ► “Hausbank for SMEs” concept with close client relationships visible to clients and a catalyst to supporting economies in times of COVID-19  Update Q2: Deepened cooperation with International Finance Corporation (IFC) announced: USD 100m financing by IFC to support SMEs during the COVID-19 crisis ► Impact-oriented business approach with no focus on consumer lending (94% loans to SMEs, 6% housing loans to individuals) with strong presence in agricultural and green loans  Update Q2: Green loan portfolio amounting to EUR 874m, with particularly strong growth of 8.4% or EUR 68m in Q2 ► Long track record of very good loan portfolio quality and low net write-offs  Update Q2: Share of portfolio in moratorium peaked at around 30%, declining at end-Q2 to 17%  Diversified portfolio with relatively low exposure to high-risk sectors Good basis to take advantage of opportunities: e.g. clients valuing ProCredit’s service quality, serving robust and expanding sectors 3 ProCredit Group | Q2 2020 results | Frankfurt am Main, 13 August 2020

Key recent developments and outlook for our countries of operations Overview of regional presence in SEE/EE COVID-19 pandemic and governmental response ► Infection and death rates increased in the second quarter after many lockdown measures were lifted, but remain well below most Western European levels ► Very differentiated situation by country, with uncertainties regarding developments in the coming weeks ► Borders partially re-opened, but new restrictions likely/currently being announced ► Fiscal and monetary measures maintained, combined with state guarantee programmes in some countries ► Legislative moratoria on debt, initially issued in a relatively Expected GDP development in SEE/EE (1) consistent way, now treated differently in different countries 2019A 2020E 2021E Macroeconomic impact 5.1% ► Strong GDP decline felt in Q2 but some signs of improvement 3.6% in June 2020 with end of lockdown ► Degree of real GDP (1) decline in 2020E and recovery in 2021E varying depending on source, with -4.5%  2020E estimated between -4.3% (EBRD) and -5.0% (WIIW) Notes: (1) Median real GDP growth; includes PCH countries of operation in SEE/EE  2021E estimated between 3.0% (WIIW) and 5.5% (EBRD) Source: IMF World Economic Outlook, WIIW, EBRD (2020) 4 ProCredit Group | Q2 2020 results | Frankfurt am Main, 13 August 2020

Portfolio and credit risk update Update as of mid-August ► Portfolio in moratorium declined to EUR 870m as of Q2-20 Serbia’s temporary opt-out moratorium expired on 30 June 2020, new two-month opt-out moratorium announced end-July  Individual client approach to credit risk management; particular focus on more affected sectors  ► Increase in Stage 2 portfolio in line with expectations; continued strong coverage of 93.6% Stage 2 loans of 5.3% (4.5% as of Q1-20) driven by individual assessment of all exposures as well as restructurings  Stage 3 portfolio almost constant at 2.5% (2.4% as of Q1-20)  ► Provision expenses in line with expectations Update of macroeconomic assumptions within the credit risk model as a consequence of the COVID-19 pandemic resulting in  EUR 8.0m provisioning expenses in H1-20 YTD provision expenses of EUR 15.7m and cost of risk of 67 bps  Full year 2020 expectation for cost of risk of ca. 75 bps  H1-20 provision expenses (1) 67 bps ca. 75 bps (in EUR m) Loan growth/ Stage 2 Stage 3 Macro Recoveries Other Total Estimated Stage 1 assumptions H1-20 FY 2020 Provision expenses Cost of risk (annualised) Notes: (1) Expenses are estimated based on the volume changes in each stage and their respective statistical expected loss 5 ProCredit Group | Q2 2020 results | Frankfurt am Main, 13 August 2020

Steady development in customer loans Loan Portfolio growth in Q2 2020 ► Strong growth in customer loans, above previous expectations (YTD EUR 255m/5.3%; Q2 EUR 213m/4.4%) +4.4%  Recovery in demand for loans after drop in March and April  Reduced lending activities of competitor banks  Growth primarily driven by investment and green loans  Positive impact on growth from moratoria; negative effects from foreign exchange Green Loan Portfolio growth ► Particularly strong growth of green loan portfolio (YTD EUR 9.1% 12.6% 15.4% 16.6% 17.3% 79m/9.9%; Q2 EUR 68m/8.4%) 874 795 17  Growth of green loans represents 31% of the group’s 17 678 total portfolio growth 15 489  Very high portfolio quality; default rate of the green loan 14 857 331 779 portfolio at 0.3% (2.2pp lower than for total loan portfolio) 662 15 (in EUR m) 475 316  Medium-term target for green loans of 20% of total loan portfolio (1) Dec-16 Dec-17 Dec-18 Dec-19 Jun-20 Business clients Private clients % of total loan portfolio Notes: Previous periods have been adjusted according to the scope of continuing operations as of June 2020 6 ProCredit Group | Q2 2020 results | Frankfurt am Main, 13 August 2020

Good deposit development through digital banking channels Deposits by type of client ► YOY increase of EUR 588m (+15%)  Achieved through growth in business and private client deposits 4,447 3,859  Increased share of sight deposits and FlexSave 3,548 1,555 1,471 ► Strong increase in Q2 (4.2%) highlighting growing 1,292 appeal of digital approach for new and existing clients, 1,147 (in EUR m) 931 748 particularly in the pandemic context 1,745 1,508 1,456  Virtually no disruptions to regular business activity Jun-18 Jun-19 Jun-20  All branches remained open Current accounts Savings accounts TDA accounts  Entire client base uses internet banking  Positive impact on liquidity and interest expenses Notes: Previous periods have been adjusted according to the scope of continuing operations as of June 2020 7 ProCredit Group | Q2 2020 results | Frankfurt am Main, 13 August 2020

H1 2020 results versus guidance Guidance 2020 Actual (updated) H1 2020 8% – 10% (excl. fx effects) ► Growth of the loan portfolio 5.3% Previous: low single-digit percentage increase (1) ► Return on average equity (RoAE) positive, but lower compared to FY 2019 5.5% ► Cost-income ratio (CIR) c 70% 66.5% ► CET1 ratio > 13% 14.1% ► Dividend payout ratio 1/3 of profits 1/3 of profits Medium term: In the medium term, assuming a stable political, economic and operating environment, we see potential for around 10% p.a. growth in the total loan portfolio, a cost-income ratio (CIR) of < 60%, and a return on average equity (RoAE) of about 10%. Risk factors to guidance: Include negative economic effects from further spreading of COVID-19, major disruptions in the Eurozone, a significant change in foreign trade or monetary policy, a worsening of the interest rate margin, and pronounced exchange rate fluctuations. Notes: (1) Annualised; 8 ProCredit Group | Q2 2020 results | Frankfurt am Main, 13 August 2020

Agenda A Highlights B Group results C Asset quality D Balance sheet, capital and funding Q&A Appendix 9 ProCredit Group | Q2 2020 results | Frankfurt am Main, 13 August 2020