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    Home Credit B.V.: IFRS consolidated results for the period ended 31 March 2017

    Solid performance in first three months with good growth in Russia.

    Amsterdam, 24 May 2017: Home Credit B.V. (‘HCBV’ or ‘the Group’), the Netherlands-based holding company for Home Credit’s leading multi-channel consumer finance operations in CEE, Asia and the US, announces its consolidated financial results for the three-month period ended 31 March 2017 in accordance with International Financial Reporting Standards (IFRS).

    “This is a good start to the year with a solid performance across our businesses. Russia was a highlight over the period showing not only that the positive trend seen last year prevails, but also delivering new business growth. All our Asian markets performed strongly. We are on track with our investment strategy to expand our network reach in high-growth markets such as China and India. 

    Our business in Russia has demonstrated an impressive performance after returning to profitability last year. Following measures to reduce costs and risk, the team succeeded in stabilising the loan book and significantly increasing new loan volumes. In doing so, the credit quality of our portfolio improved further. In Russia and Kazakhstan, we began to invest in new business initiatives, making further progress in developing our online sales, payments and services offering.  

    In Asia, we executed our goal of further investment in developing our footprint, which resulted in a strong increase of our distribution networks and number of loans granted across China, India, the Philippines and Vietnam. Meanwhile, we again demonstrated our leadership by becoming number one in our segment in Indonesia. Our formula of partnering with manufacturers and offering zero- or low-interest products has proven successful as we continue to attract new customers and increase cross selling opportunities. 

    In summary, despite the normal seasonality present in the first quarter, we delivered a solid performance with a significant increase in overall profit compared to last year. For the remainder of the year our focus will remain on expanding our customer base while remaining vigilant on risk and costs. It is against this background that we are confident that we will continue to deliver.”  

    Jiri Smejc,
    Chairman of the Board of Directors and Group Chief Executive Officer, Home Credit B.V.



    Home Credit continued the growth trend from 2016 and delivered a net profit of EUR 80 million in the first three months, significantly up from the EUR 15 million the previous year. Overall new loans more than doubled in the first three months 2017, compared to the same period a year earlier. The number of active clients increased by 17.4% compared to the end of 2016. The NPL ratio decreased further to 5.7%. These results are testament to Home Credit’s balanced approach of having a good geographical spread while improving the quality of the loan portfolio.  

    In Russia, the measures taken by Home Credit have returned the business to healthy profitability. Home Credit continued to develop its distribution network, while maintaining its focus on securing new loans from higher-quality customers. The new loans underwritten in the three-month period amounted to EUR 629.5 million, a 56.2% increase year on year. Consequently, the NPL ratio further decreased to 5.6%, compared to 6.6% in the previous quarter. Home Credit continued to expand its online and digital channel offering. 

    Across Asia, Home Credit has redoubled its efforts to provide consumer finance products which are easily accessible, while expanding its network. Its increased market share enabled Home Credit to reach 18 million customers in the region (excluding Kazakhstan) by the end of the period, through a combination of its POS network and joint campaigns with retailers and electronics producers. New loan volumes more than doubled year on year in China, while in Vietnam they rose by 76.4%. In India, Home Credit now has a presence in 70 major cities with over 8,200 distribution points. 



    • Operating income in Q1 2017 was up 62% year on year to EUR 678 million (Q1 2016: EUR 419 million). The number of active clients reached 23.5 million, up from 20.1 million at the end of 2016.
    • The Group posted a net profit of EUR 80 million overall in the first quarter compared to a profit of EUR 15 million in the same period a year earlier. This was driven by a return to growth in Russia as the Group re-balanced its business and underwrote healthy new loans. 
    • HCBV’s multi-channel network consisted of 308,703 distribution points, up 14.1% from the end of 2016, with 306,656 POS and loan offices, 323 bank branches and 1,724 post offices. The network was mainly expanded in more nascent operations in Asia. Further investments were also made to increase the online presence of the Group.
    • New loan volume was EUR 4,287 million, up 103% year on year (Q1 2016: EUR 2,109 million). In China, new loan volumes made a strong start to the year, rising to EUR 2.77 billion (Q1 2016: EUR 1.17 billion) while in Vietnam they rose to EUR 288 million from EUR 163 million in Q1 2016, in line with the growth plan in the region. In Russia, measures taken enabled the Group to increase new loan volumes 56% year on year.
    • General and Administrative and other operating expenses were EUR 359 million over the period.
    • The net loan portfolio increased to EUR 11,332 million (YE 2016: EUR 9,866 million) following continued growth mainly in Asia.
    • The quality of HCBV’s loan portfolio improved in Q1 2017 with the NPL (i.e. loans more than 90 days overdue) share of the gross loan book down to 5.7% (6.1% as at 31 December 2016 and 9.0% at 31 March 2016). 
    • The NPL coverage ratio rose to 134.7% (31 December 2016: 128.2%).
    • Impairment losses were EUR 201 million over the period, up from EUR 145 million over the same period a year earlier.
    • HCBV remains strongly capitalised with a total equity of EUR 1,599 million and a solid equity-to-asset ratio of 10.1%.


    Business Results Q1 2017 YE 2016 Q1 2016
    Loans granted YTD  (EUR million) 4,287 11,536 2,109
    Number of active clients (million) 23.5 20.1 14.0
    Number of distribution points 308,703 270,537 195,379
    - Number of POSs and loan offices 306,656 268,486 193,041
    - Number of bank branches 323 328 373
    - Number of post offices 1,724 1,723 1,965
    Number of employees (thousands) 135.5 120.2 77.5
    Profit and Loss (EUR millions) Q1 2017 2016 Q1 2016
    Net interest income 517 1,532 332
    Operating income 678 2,000 419
    Credit risk costs1 (201) (563) (145)
    Operating expenses2 (359) (1,115) (247)
    Net result for the year 80 210 15

    1) Credit risk costs represent impairment losses on the loan portfolio
    2) Operating expenses comprise general administrative and other operating expenses

    Financial Position (EUR millions) Q1 2017 YE 2016
    Total assets 15,851 14,704
    Net loan portfolio 11,332 9,866
    Equity 1,599 1,501
    Wholesale funding 7,966 7,163
    Customer deposits and current accounts 5,639 5,401

    Source: Home Credit B.V., consolidated.

    Profit and Loss  Ratios Q1 2017 2016 Q1 2016
    Net interest margin1 14.2% 14.0% 14.5%
    Net interest income to operating income 76.2% 76.6% 79.2%
    Cost to average net loans2 13.6% 15.1% 16.4%
    Cost to income ratio3 53.0% 55.7% 58.9%
    Cost of risk ratio4 7.6% 7.6% 9.6%
    ROAA5 2.1% 1.8% 0.6%
    Financial Position Ratios Q1 2017 2016 Q1 2016
    Net loans to total assets 71.5% 67.1% 62.9%
    NPL ratio6 5.1% 6.1% 9.0%
    NPL coverage ratio7 134.7% 128.2% 119.6%
    Deposits to total liabilities 39.6% 40.9% 52.9%
    Equity to assets 10.1% 10.2% 12.0%
    Equity and deposits to net loans ratio 63.9% 70.0% 93.0%

    Source: Home Credit B.V., consolidated.
    Ratios are annualized where applicable.

    1) Net interest margin is calculated as net interest income divided by the average balance of net interest earning assets.
    2) Cost to average net loans is calculated as general administrative and other operating expenses divided by average net loans.
    3) Cost to income ratio is calculated as general administrative and other operating expenses divided by operating income.
    4) Cost of risk represents impairment losses divided by average balance of net loans to customers.
    5) RoAA is calculated as net profit divided by average balance of total assets.
    6) NPL ratio is calculated as gross non-performing loans divided by total gross loans. The Group defines non-performing loans as collectively impaired loans that are overdue by more than 90 days as well as loans considered individually impaired.
    7) NPL coverage ratio is calculated as loan loss provisions divided by gross non-performing loans.

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