ProCredit Holding - Looking oversold at FY21 P/BV of 0.3x
ProCredit Holding (PCB) has reported a strong set of FY21 results, with net income up 92.4% y-o-y to €79.6m and an ROE of 9.7%. However, this was overshadowed by Russia’s invasion of Ukraine, where PCB had 12.8% of its loan book at end-2021 and generated 27.2% of net profit before allocation of group functions in FY21. While the situation in Ukraine remains difficult to predict, we note that PCB’s loss is limited to the €129.9m equity and €48.8m other funding provided to the local bank by ProCredit Holding and ProCredit Germany (c 21% of PCB’s group equity) at end-2021. We temporarily refrain from issuing forecasts and a valuation for PCB, but believe that investors may have overreacted as it is now traded at only c 0.3x its group tangible book value at end-2021 of €14.2 per share.Procredit Holding Ag & Co Kgaa. ProCredit Holding AG & Co KGaA is a Germany-based company, which is primarily engaged in the financial services industry. The Company operates as a parent for development-oriented ProCredit group, which consists of commercial banks for small and medium enterprises (SMEs) and whose operational focus is on South Eastern and Eastern Europe. In addition to this regional presence, the ProCredit group is also active in South America and Germany. The Company operates through various subsidiaries, such as ProCredit Bank SA, ProCredit Bank (Bulgaria) EAD, ProCredit Bank AG, ProCredit Academy GmbH, Quipu GmbH, ProCredit Bank SA, ProCredit Bank ShA, Banco ProCredit Colombia SA, Banco ProCredit SA, JSC ProCredit Bank, Banco Pyme Los Andes ProCredit SA, BC ProCredit Bank, JSC ProCredit Bank, as well as operates special purpose vehicles PC Finance II BV and Fideicosimo Primera Tituarizacion de Cartera Comercial Pymes ProCredit, among others.
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