- Strong and well diversified loan growth of EUR 504 million or 7.2% across all client segments, adjusted for foreign exchange effects
- Group result of EUR 47.0 million corresponds to return on equity of 9.0%
- Cost-income ratio at 70.9%; cost increases due to strategic investments in growth catalysts largely absorbed
- Low cost of risk at 1 basis point, reflecting strong portfolio quality amid challenging global macroeconomic environment
- Common Equity Tier 1 (CET1) capital ratio on comfortable level of 13.1%
- Management confirms 2025 outlook for loan growth, return on equity and CET1 capital ratio; cost-income ratio expected at around 70%
Frankfurt am Main, 14 August 2025 – The German impact banking group ProCredit, which is mainly active in South Eastern and Eastern Europe, has delivered strongly on its ambitious growth and transformation strategy in the first six months of 2025. The group’s loan portfolio grew by 7.2% (adjusted for foreign exchange effects) in the first half of the year, especially with micro and small enterprises as well as private clients. Strategic investments in growth and scaling initiatives were firmly in the execution phase. The increase in the cost base relating to these strategic growth investments was largely absorbed in H1 2025, resulting in a temporarily elevated cost-income ratio of 70.9%. The group result for the first half of 2025 was EUR 47.0 million, which corresponds to an annualised return on equity of 9.0%. The return on equity for the group, excluding its regional segment South America, amounted to 10.0%.
In H1 2025, the group’s loan portfolio grew by a strong EUR 504 million or 7.2% (adjusted for foreign exchange effects) across all client segments and particularly strongly in some of the group’s smaller banks. Without adjusting for foreign exchange effects, loans grew by EUR 347 million or 4.9% (H1-2024: EUR 429 million or 6.9%). More than 70% of the total growth came from lower-volume exposures to micro and small enterprises as well as private clients, in line with the group’s balance sheet transformation strategy. The group’s deposit base grew by EUR 120 million or 1.5% (adjusted for foreign exchange effects), mainly coming from private clients. Overall, deposits declined slightly, by EUR 72 million or 0.9% (H1-2024: EUR 295 million or 4.1%), mainly due to seasonality and foreign exchange effects.
“The ambitious growth and transformation strategy we launched in early 2024 – and delivered on strongly last year – is increasingly taking shape. We are driving broad-based, granular growth across client segments, industries and geographies. Our loan portfolio in the strategically important lower-volume segments has grown by an outstanding 30% since end-2023, illustrating the progress the group is making. Moreover, the cost increases from our strategic investments, designed to lay a sustainable foundation for reaching our medium-term target loan volume of over EUR 10 billion, have largely been absorbed, in line with our expectations for this year. While we continue to move forward with important IT developments, we have now reached a point at which we can begin rolling out components of our enhanced retail banking architecture. Importantly, all these strategic advancements are made while at the same time delivering a good level of profitability in this transition year, particularly also against the backdrop of a challenging geopolitical and macroeconomic environment.
With our initiatives, we are not only building scale but also aim to transform both sides of our balance sheet towards greater granularity – supporting long-term margin consolidation and enabling resilient growth. As global interest rates continue to decline, we feel reaffirmed in our strategic course and are confident it will support the attractive, medium-term levels of profitability that are reflected in our guidance”, commented Hubert Spechtenhauser, Chairman of the Management Board of ProCredit Holding AG.
Cost increases from strategic investments in growth catalysts largely absorbed
Net interest income decreased by EUR 9.2 million compared to the same period in the previous year to EUR 171.3 million (H1-2024: EUR 180.6 million), as positive volume effects were more than offset by negative pricing effects from lower policy rates. The net interest margin stood at 3.2% in H1 2025 (H1-2024: 3.6%) and showed a broadly stable development quarter-on-quarter.
Net fee and commission income continued to develop positively during the period and grew by EUR 2.7 million or 6.2% to a level of EUR 47.0 million (H1-2024: EUR 44.3 million), mainly due to strong development of income from transactions and foreign exchange business. Net other operating income contributed EUR -5.3 million (H1-2024: EUR -5.1 million) to the overall result.
Personnel and administrative expenses grew by EUR 10.4 million or 7.4%, mainly on account of last year’s strategic investments. Those investments have become visible in, among other areas, an increase in staff numbers by 738 or 19% and an expansion of the group’s branch and service point network by 47 in 2024. In the second quarter of 2025, the increases in the cost base due to these investments had largely been absorbed, as reflected in broadly steady staff and branch numbers since the beginning of the year and the moderate quarter-on-quarter increase in the group’s cost base. The cost-income ratio stood at an elevated level of 70.9% (H1-2024: 64.1%), also reflecting the effects from lower interest rates on short-term assets, in particular deposits with central banks, coupled with continued high market interest rates on customer deposits.
The share of defaulted loans remained stable at the low level of 2.1% (Q4-2024: 2.3%). Loss allowances in H1-2025 were low at EUR 0.3 million (H1-2024: EUR 5.7 million), which corresponds to a cost of risk of 1 basis point (H1-2024: 18 basis points). In addition to the group’s strong portfolio quality, this development was mainly supported by continued strong recoveries from written-off loans in the amount of EUR 6.1 million.
At 13.1%, the group’s CET1 ratio remained stable compared to year-end 2024 (Q4-2024: 13.1%). The increase in risk weighted assets from the strong business growth in the first six months of the year was largely offset by results recognitions. One third of the interim result is accrued for next year’s planned dividend distribution, in line with the group’s dividend policy.
Good regional development across South Eastern and Eastern Europe
In its main regional segments, South Eastern and Eastern Europe, the group developed positively. Excluding the regional segment South America, the group achieved loan growth of 7.7% (adjusted for foreign exchange effects), a return on equity of 10.0% and a cost-income ratio of 67.9%. The group’s operations in Ecuador continued to contribute negatively to the consolidated result, by EUR -5.4 million in H1 2025 (H1-2024: EUR -4.6 million). In Ukraine, the first half of 2025 was characterised by strong loan growth of 13% (adjusted for foreign exchange effects). This resumed growth in the country follows the investment guarantee from the Federal Government of Germany received in December 2024.
Management Board confirms 2025 outlook for loan growth, return on equity and CET1 capital ratio, and updates outlook for cost-income ratio
Given the strong business development and good financial result in the first half of 2025, the Management Board confirmed the outlook for loan growth, return on equity and the CET1 capital ratio for the full year. The loan portfolio is expected to grow by around 12%, adjusted for foreign exchange effects, while the return on equity is expected to be around 10%. The CET1 capital ratio is expected to be at a comfortable level of around 13% at year-end 2025. For the cost-income ratio, the Management Board updated its outlook and now assumes a ratio of around 70% for 2025 (previously: around the level recorded for 2024, 68.1%).
The ProCredit group’s Interim Report as of 30 June 2025 is available as of today on the ProCredit Holding website under Investor Relations at: https://www.procredit-holding.com/en/investor-relations/reports-publications/financial-reports. The financial calendar for ProCredit Holding is available at: https://www.procredit-holding.com/investor-relations/financial-calendar.per mattis, pulvinar dapibus leo.