ProCredit Holding AG & Co. KGaA approved the conversion into a stock corporation and provides updates on loan activities in Ukraine

The parent company of the sustainable ProCredit banking group will be converted from a partnership limited by shares (KGaA) into a stock corporation (AG). How is the ProCredit share doing?

Yesterday at the Annual General Meeting in Frankfurt, the shareholders of ProCredit Holding AG & Co. KGaA approved the Management Board’s proposal to operate the company in the future in the legal form of a stock corporation.

With the conversion, ProCredit wants to simplify the company structure and hopes for positive effects on the stock market price. “We currently assume that we will be able to implement this change in the coming months,” says Hubert Spechtenhauser, CEO of ProCredit General Partner AG. “All in all, we are confident that the group’s capital market presence will be further strengthened by the internationally recognized and market-friendly corporate structure.”

High risks in Ukraine

ProCredit strives to align its activities with the Paris climate goals. According to the banking group, 20 percent of the loans granted are now tied to sustainable projects. Business activities focus on banking services for small and medium-sized enterprises (SMEs) in Southeastern and Eastern Europe.

ProCredit also grants loans in Ukraine. The risk provisions for this, which have increased significantly since the outbreak of the war, weighed on business in 2022. The management expects a positive development this year. In the first quarter, the return on equity was 13.3 percent. A year earlier it was minus 0.8 percent. For the year as a whole, ProCredit assumes a return on equity of 8 to 10 percent, and in the medium term it should be 12 percent. At the annual general meeting, it was also decided not to distribute a dividend for 2022 due to the Ukraine war.

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