Annual Report 2010 - ProCredit Bank

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32 Annual Report 2010 The ProCredit Group: Responsible Neighbourhood Banks for Small Businesses and Ordinary People The ProCredit group comprises 21 financial institutions providing banking services in transition economies and developing countries. ProCredit banks are responsible neighbourhood banks. This means, in the neighbourhoods in which we work, we aim to: • be the house bank of choice for the very small, small and medium-sized enterprises which create jobs and drive economic development, and • provide secure and transparent savings and banking services to ordinary people who are looking for an affordable bank they can trust. At the end of 2010 our 15,600 employees, working in some 740 branches, were serving 3 million customers in Eastern Europe, Latin America and Africa. The history of the ProCredit group is a rich one and forms the basis of what we are today. The first ProCredit banks were founded more than a decade ago with the aim of making a development impact by promoting the growth of small businesses. We sought to achieve this by providing loans tailored to their requirements and offering deposit facilities that would encourage low-income individuals and families to save. The group has grown strongly over the years, and today we are one of the leading providers of banking services to small business clients in most of the countries in which we operate. Our origins lie in our pioneering microfinance positioning. This positioning has developed as our markets and our clients have developed so our socially responsible approach remains as relevant today as ever. Its importance has been underscored by the financial crisis and subsequent significant macroeconomic decline which most of our countries of operation experienced over the last two years. As enterprises adjust to and expand again in their new economic reality and ordinary people rebuild their trust in banks, it is clear that our customers need a reliable banking partner now more than ever. This has also given us the impetus to further strengthen our comprehensive customer-oriented approach with more highly specialised and well trained staff. Unlike most other banks operating in our markets, we have always avoided aggressive consumer lending and speculative lines of business. Instead, the ProCredit banks work in close contact with their clients to gain a full understanding of the problems small businesses face and the opportunities that are available to them. Our credit technology, developed over many years with the support of the German consulting company IPC, relies on the careful individual analysis of credit risks. By making the effort to know our clients well and maintain long-term relationships based on trust and understanding, we are well positioned to support them not only when the economy is buoyant, but also during a downturn and recovery. Over the last two years, the ability of our loan officers to proactively make appropriate adaptations to payment plans where necessary to reflect clients’ new and more challenging sales environments has played an important role in maintaining good loan portfolio quality. We not only extend loans, but also offer our enterprise clients a broad range of other banking services such as cash management, domestic and international money transfers, payroll services, POS terminals and payment and credit cards. These services are geared towards assisting our business clients to operate more efficiently and more formally and thus help to strengthen the real economy and the banking sector as a whole. In these terms ProCredit has a “whole customer” focus rather than a simple product focus. Our staff and our branches are becoming more specialised and better equipped to cater to the needs of different client segments. Today we have less of a focus on traditional “microfinance” than we did in the past. At the end of 2009, we increased the minimum loan size for enterprise clients to EUR/USD 2,000 in most countries since we found that below this limit there is such broad access to loans from consumer finance providers that “excess” had become more of a challenge for many clients than “access”. For these groups we prefer to offer deposit accounts and other banking services rather than credit. Our targeted efforts to foster a savings culture in our countries of operation have enabled us to build a stable deposit base. ProCredit deposit facilities are appropriate for a broad range of lower- and middle-income customers. We place particular emphasis on working with the
The ProCredit Group: Responsible Neighbourhood Banks for Small Businesses and Ordinary People 33 owners, employees and families associated with our core target group of very small, small and medium-sized businesses. ProCredit banks offer simple savings products and place great emphasis on promoting children’s savings accounts and on running financial literacy campaigns in the broader community. In addition to deposit facilities, we offer our clients a full range of standard retail banking services. Over 2010 ProCredit institutions managed to maintain a high level of liquidity given the stability of their loyal retail deposit base. The ProCredit group has a simple business model: providing banking services to a diverse range of enterprises and the ordinary people who live and work around our branches. As a result, our banks have a transparent, low-risk profile. We do not rely heavily on capital market funding and have no exposure to complex financial products. Furthermore, our staff are well trained, flexible and able to provide competent advice to clients, guiding them through difficult times as well as good times. Despite the turmoil of the global financial markets, the performance of the ProCredit group has been remarkably stable: we ended 2010 with a good liquidity position, comfortable capital adequacy, PAR over 30 days of 3.7%, and a modest profit. Given the very difficult macroeconomic situation in many of our countries of operation, this was a strong performance. Our shareholders have always taken a conservative, long-term view of business development, The international group of ProCredit institutions; see also www.procredit-holding.com ProCredit Mexico Banco ProCredit Honduras Banco ProCredit El Salvador Banco ProCredit Nicaragua Banco ProCredit Colombia Banco ProCredit Ecuador Banco Los Andes ProCredit Bolivia ProCredit Holding Germany ProCredit Bank Serbia ProCredit Bank Bosnia and Herzegovina ProCredit Bank UNMIK/Kosovo ProCredit Bank Albania ProCredit Bank Macedonia ProCredit Savings and Loans Ghana ProCredit Bank Democratic Republic of Congo Banco ProCredit Mozambique ProCredit Bank Ukraine ProCredit Bank Moldova ProCredit Bank Romania ProCredit Bank Georgia ProCredit Bank Armenia ProCredit Bank Bulgaria
Page 1 and 2: Annual Report 2010
Page 3 and 4: Contents 3 Mission Statement 4 Lett
Page 5 and 6: Letter from the Board of Directors
Page 7 and 8: The Bank and its Shareholders 7 Com
Page 9 and 10: Special Feature 9 of life, ProCredi
Page 11 and 12: Management Business Review 11 Polit
Page 13 and 14: Management Business Review 13
Page 15 and 16: Management Business Review 15 the b
Page 17 and 18: Management Business Review 17 Domes
Page 19 and 20: Management Business Review 19 partn
Page 21 and 22: Risk Management 21 Credit Risk Mana
Page 23 and 24: Risk Management 23 bia, like the ot
Page 25 and 26: Risk Management 25 In 2010 the bank
Page 27 and 28: Branch Network 27 tegic, often dens
Page 29 and 30: Organisation, Staff and Staff Devel
Page 31: Business Ethics and Environmental S
Page 35 and 36: The ProCredit Group: Responsible Ne
Page 37 and 38: ProCredit in Eastern Europe 37 Bela
Page 39 and 40: ProCredit in Eastern Europe 39 Name
Page 41 and 42: Our Clients 41 Katalin Muzlai, Catt
Page 43 and 44: Our Clients 43 Aleksandra Zoric Krz
Page 45 and 46: Financial Statements 45
Page 47 and 48: Financial Statements 47
Page 49 and 50: Financial Statements 49 Consolidate
Page 51 and 52: Financial Statements 51 Group Cash-
Page 53 and 54: Financial Statements 53 Gains and l
Page 55 and 56: Financial Statements 55 N) Property
Page 57 and 58: Financial Statements 57 Y) Comparat
Page 59 and 60: Financial Statements 59 Table below
Page 61 and 62: Financial Statements 61 Individual
Page 63 and 64: Financial Statements 63 2010 2009 I
Page 65 and 66: Financial Statements 65 (b) Loans a
Page 67 and 68: Financial Statements 67 2010 2009 P
Page 69 and 70: Financial Statements 69 31 December
Page 71 and 72: Financial Statements 71 Assessment
Page 73 and 74: Financial Statements 73 Subordinate
Page 75 and 76: Financial Statements 75 6. Net fee
Page 77 and 78: Financial Statements 77 Loans and a
Page 79 and 80: Financial Statements 79 22. Other a
Page 81 and 82: Financial Statements 81 27. Subordi
Page 83 and 84:
Financial Statements 83 At 31 Decem
Page 85 and 86:
Contact Addresses 85 Sabac 1 Cara D
Page 87:
Contact Addresses 87
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