results
Banque
PSA Finance (BPSAF) has released its annual results for 2007,
which show that the captive managed to grow operating income by 0.7
per cent to €608m (£462m), despite what it described as a “highly
volatile banking environment”. Net banking revenue was up by 2 per
cent year on year, to €981m (£745m) (2006: €962m [£730m]).
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A rise in BPSAF’s loan portfolio and “well-managed risk control”
were the main growth drivers, the captive said. “As of December 31,
2007, outstanding retail loans stood at €17.85bn (£13.55bn), an
increase of 3.5 per cent over the year-earlier figure of €17.25bn
(£13.1bn),” it announced.
Turnover rose to €2bn (£1.5bn), up 13.5 per cent from the
corresponding figure for 2006 of €1.8bn (£1.4bn). Overall, the
captive extended €9.3bn (£7.1bn)-worth of retail financing in the
12 months to December 31 2007, compared with €8.8bn (£6.7bn) at the
end of 2006, a year-on-year rise of 5.5 per cent. “New retail
financing was provided for 851,000 new and used vehicles during the
year, up 3.9 per cent over 2006,” BPASF said.
BPSAF said it expects volume growth of around 5 per cent for
2008, aided by scheduled product launches from its parent, PSA
Peugeot Citroën, in the second half of the year, which are expected
to boost the manufacturer’s unit sales to between 3.55m-3.65m. The
proportion of new and used Peugeot and Citroën cars financed by
BPASF remained steady at 21.6 per cent (26.5 per cent in the
UK).
Rising rates
The captive experienced a highly competitive environment in the
first half of 2007, BPASF said, as some of its competitors chose to
chase volume over margin by not passing on to customers the impact
of successive interest rate rises.
The credit crunch which first manifested itself in the summer of
last year has also caused problems, with BPASF reporting that
margins on outstanding loans were eroded as the captive’s
refinancing costs rose, thanks to higher market interest rates.
However, the impact of the rising cost of funds for the captive
was limited to just €1.9m (£1.4m) thanks to its use of “swaptions”
– interest rate swap options – which “capped refinancing costs on
new lending”, BPSAF said.
Motor Finance Issue: 41 – March 08
Published for the web: February 27 08 18:1
Last Updated: March 13 08 12:36
