Home Credit B.V. IFRS consolidated results for the nine month period ended 30 September 2011: Continued strong performance with growth in cash loans and retail deposits while costs remain under control
“In a challenging economic environment we have built on our achievements in the first half of this year and have continued to deliver portfolio growth and realise our network expansion plans whilst managing our costs. Our retail deposit strategy continues to have positive results and our increasingly diversified funding base and strong liquidity position will enable us to continue to push the company forward and achieve its long term objectives for growth.” Alexander Labak, HCBV Chief Executive Officer
- Net profit amounted to EUR 195 million as of 30 September 2011 with an increase of 12% y-o-y (compared to 9M 2010: net profit EUR 174 million) despite the tough economic backdrop.
- Operating income for Q3 2011 increased by 24.0% to EUR 698 million in line with portfolio growth (compared to Q3 2010: EUR 563 million).
- Net loan portfolio growth continued, up 16.0% to EUR 2,526 million as of 30 September 2011 from EUR 2,177 million as of 31 December 2010. Loan growth was driven by a continued increase in cash loans, which nearly doubled over the period and now comprise 39% of the net loan portfolio, mainly driven by the strategy to expand the distribution network in Russia.
- Retail deposits continued to rise with a 35.1% increase compared to the end of 2010 as we successfully attracted new customers. The share of customer current accounts and term deposits comprised 31.0% of the total liabilities (up compared to the position at 31 December 2010: 27.5%).
- Quality of HCBV loan portfolio in 9M 2011: NPLs comprised 9.4% of the gross loan book (compared to 10.1% as of 31 December 2010 and 12.1% as of 30 September 2010). At the same time the coverage ratio remains strong as NPLs were sufficiently covered by provisions at a slightly increased level of 108.2%.
- HCBV remains strongly capitalized with continued diversification of funding: total equity amounted to EUR 763 million as of 30 September 2011 as we continue to attract customer deposits, an increasingly important source of funding.
- The consolidated ratio of total equity to total assets decreased to 22.9% as of 30 September 2011 (30.3% as of 31 December 2010) primarily due to the EUR 320 million dividend payout in H1 2011.
In the first nine months of 2011 HCBV continued to demonstrate strong business and financial performance. Net profit for the nine month period ended 30 September 2011 amounted to EUR 195 million, an increase of 12% compared to the same period in 2010.
Net interest income for the nine month period ended 30 September 2011 increased by EUR 80 million or 18.5% to EUR 513 million, compared to EUR 432 million for the prior year comparative period, in line with portfolio growth.
Net fee and commission income increased by 10.0% to EUR 139 for the first nine months of 2011 (from EUR 127 for 9M 2010).
General administrative and other operating expenses rose but remain very much under control at EUR 297 million (from EUR 249 million for 9M 2010) despite aggressive branch expansion in Russia. The cost to income ratio reflected this increase at 42.6% and was kept in check as a result of ongoing Group cost management initiatives.
The main growth driver of the balance sheet continues to be the increase in cash loans supported by our strategy to expand our distribution network in Russia, which so far this year has more than tripled the number of Home Credit branches to 822 branches by the end of September 2011 from 261 on 31 December 2010. We will continue to work on increasing our cash loan market share while maintaining our leadership position in POS loans.
HCBV’s net loan portfolio has grown by 16% to EUR 2,526 million since the end of 2010. The high quality of HCBV’s loan portfolio was maintained during the first nine months of 2011, with an NPL (non-performing loans older 90 days as a percentage of gross loan book) ratio of 9.4% as of 30 September 2011. NPLs were adequately covered by provisions at a level of 108.2%.
HCBV maintains a strong funding base and liquidity position and the company’s funding structure continues to diversify as Home Credit successfully attracted deposits from individual and corporate customers.