ProCredit Holding AG & Co. KGaA

In H1 2026, ProCredit said its loan portfolio grew 8% and surpassed EUR 8 billion for the first time, active clients increased by around 27,000, operating income rose 7%, and net interest income increased 11.6% year over year, or almost EUR 20 million. Profit of the period was EUR 38.5 million, the cost-income ratio was 71.2%, and return on tangible equity for H1 was 7.3%. In Q2, net interest income reached EUR 99 million, up more than 7% versus Q1 and EUR 12.6 million, or almost 15%, above Q2 2025; quarterly net interest margin improved 18 basis points from Q1 to 3.4%. Loss allowances were EUR 6.4 million in Q2, including EUR 2.7 million of additional portfolio-level provisions, and the cost of risk was 31 basis points. On capital, CET1 was 12.7%, Tier 1 was 14.7%, and total capital was 17.8% as of June 30, supported by the EUR 150 million AT1 issuance. Management kept its 2026 outlook for loan growth at 12% to 15% and confirmed 7% RoE for the year, with medium-term targets of loan portfolio growth beyond EUR 10 billion, RoE of around 13% to 14%, and cost-income ratio toward 57%.

Eriola Bibolli framed the first half as broadly in line with expectations and highlighted that growth is being driven by the group’s strategic shift toward micro, retail, and small-business banking. She emphasized the rollout of new mobile apps, end-to-end digital onboarding, and a more customer-focused, digital-first retail model as key enablers of client acquisition and operating leverage. Her tone was constructive and confident, but she also acknowledged ongoing macro and geopolitical risks, especially from the war in Ukraine and tensions in the Middle East.

Christian Dagrosa focused on the improving mix of the balance sheet and the earnings benefits from that shift. He said higher-yielding retail, micro, and small business loans now make up 49% of total loans, up 3 percentage points year over year and 8 points since end-2023, and that this is increasingly translating into higher NII and a quarterly NIM of 3.4%. He also noted that costs rose 7% year over year in H1, driven by personnel, software, marketing, and depreciation, while loss allowances were EUR 6.4 million in Q2 and management overlays were steady at around EUR 48.8 million, roughly 25% of total provisions. On capital, he cited CET1 of 12.7%, Tier 1 of 14.7%, and total capital of 17.8%, all above requirements.

Analysts pressed on deposit growth, loan-to-deposit flexibility, funding costs, the sustainability of the margin improvement, and the higher tax rate in Q2. Management said it is confident of double-digit deposit growth in H2, expects stronger SME and micro deposit seasonality, and does not plan to rely on higher deposit-marketing spend, instead shifting toward a broader customer-centric digital acquisition strategy. On loan-to-deposit ratios, the CFO said there is no fixed target or upper threshold, and funding quality and mix matter more than a single ratio. Management also said the AT1 issuance was already part of its 2026 capital plan, the margin improvement is considered structural and sustainable into H2, and the higher tax rate was mainly due to Ukraine, where profit before tax was higher in Q2 than in Q1 because loan loss provisions were higher in Q1.