This article first appeared on GuruFocus .
Release Date: May 13, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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ProCredit Holding AG ( XTER:PCZ ) reported a solid start to the year with loan growth continuing at a healthy pace, particularly in the micro and retail segments.
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Operating income increased by approximately 5%, driven by a positive trajectory in net interest income.
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The company experienced a 10% growth in its micro-enterprise client base, indicating strong client acquisition momentum.
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ProCredit Holding AG ( XTER:PCZ ) maintained a solid capitalization level of 12.9% CET1, reflecting financial stability.
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The company successfully launched a new mobile banking application in North Macedonia and Albania, enhancing its digital banking platform.
Negative Points
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The cost-income ratio remained high at 71%, indicating room for improvement in operational efficiency.
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Geopolitical uncertainties, particularly the war in Ukraine and tensions in the Middle East, pose significant risks to the region and could impact the company's operations.
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Net fee income declined year-on-year due to the introduction of the euro in Bulgaria and SEPA payments, affecting foreign exchange transaction margins.
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Loss allowances increased, particularly in Ukraine, due to emerging risks associated with attacks on energy infrastructure.
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The anticipated impact of the euro introduction in Bulgaria and RWA efficiency measures limited more pronounced income growth.
Q & A Highlights
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Q: Can you tell us more about the current interest rate ceilings in Bosnia and Herzegovina and Kosovo, and how do they affect your business? Also, what are your expectations for loan growth in Bulgaria following the euro adoption? A: The interest rate ceilings in Bosnia and Kosovo are integrated into our broader interest rate risk management framework. We do not pass on the entire Euribor to clients, maintaining a delta to manage interest rate risk effectively. Regarding Bulgaria, we have seen strong growth, around 3.5% in the first quarter, and expect increased foreign direct investment to drive business growth and financing demand, especially in SMEs.
Q: When do you expect the higher share of higher-yielding segments to reflect an improving net interest margin? Also, how much of the announced one-off costs were included in Q1, and should we expect a significant cost increase through the year? A: We are already seeing improvements in net interest margin due to absorbing higher interest expenses without reduction. The balance sheet transformation is ongoing, and we expect the net interest margin to grow as this progresses. Regarding costs, Q1 is typically slow, but we expect costs to increase steadily in the coming quarters, driven by IT initiatives and marketing, with operating income expected to grow faster.
Q: Should we expect an acceleration of loan growth, which could support the NIM? Also, will there be a positive development in net fee income (NFI) in Q3 and Q4 year-on-year? A: The structure of loan growth is crucial for sustaining and increasing the net interest margin. In Q1, 80% of loan growth came from granular segments, which supports NIM stability. We expect this structure to continue, accelerating as we simplify processes and roll out loan origination tools. Regarding NFI, the impact of SEPA and euro conversion in Bulgaria was negative, but we are focusing on stabilizing NFI through trade finance and launching investment and insurance services.
Q: Do you expect any changes with regards to the purchase price for the Ecuador divestment, and will the planned costs regarding the Ecuador strip-off come in as expected? A: There are no expected changes to the purchase price for the Ecuador divestment. All statements made at the beginning of the year remain valid, and the agreements need to be formalized going forward, but no changes are anticipated.
Q: What are your expectations for the net interest margin (NIM) given the current dynamics? A: We are seeing stabilization in the net interest margin due to absorbing higher interest expenses without a reduction. As the balance sheet transformation progresses, we expect the NIM to grow, supported by initiatives to attract more site deposits and the growth in higher-yielding segments.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
