RCI BANQUE
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Captive’s Q3 results suffer in tough
climate
The latest third quarter results for Renault show that revenues
at its captive finance arm RCI Banque fell by 2.5 per cent compared
with Q3 2007, to €512m (£). Overall, the contribution to group
revenues made by the Sales Financing division grew by 1.8 per cent
in the period January-September 2008, to €1.6bn (£).
A spokesman for RCI Banque confirmed that the captive has
tightened its underwriting standards for UK consumers. “We have
decided to tighten up our credit approval considering the economic
situation in UK and the eventual degradation of the cost of risk,”
he said.
Credit ratings agency Moody’s announced that it has placed RCI
Banque’s long-term ratings on review for a possible downgrade,
citing “expectations of a decrease in the bank’s profitability
driven by lower lending volumes and as well as by a deterioration
of the bank’s asset quality leading to increasing provisioning
levels”.
The ratings agency added that it “remains concerned by the
liquidity position of the bank which is a wholesale funded
institution and is therefore sensitive to more limited and more
expensive access to financial markets as a result of the current
challenging environment.” The lower sales forecast announced by
Renault also played a part, Moody’s said, since RCI Banque, as a
wholly-owned captive finance arm, “is reliant on the number of cars
sold by its parent and will therefore suffer from a decrease in its
lending volumes, weakening its profitability.”
BANQUE PSA FINANCE
Strong revenue growth in Q3 for Peugeot’s sales
financing arm
The captive finance arm of PSA Peugeot-Citroën, Banque PSA
Finance, has reported Q3 sales growth year-on-year of 7 per cent to
€534m/£457m (Q3 2007: €499m/£427m) – despite sales at its parent
company falling by 7.1 per cent to €10.2bn (£8.7bn).
The manufacturer said that its captive had managed to offset
increased funding costs by passing them on to customers in the form
of higher prices.
The number of new lease and finance contracts signed in the
quarter grew slightly to 196,025, up 0.5 per cent on the same
quarter last year. The total outstanding loan portfolio at the end
of Q3 2008 was €23.8bn (£20.4bn), up 2.6 per cent on last year.
“Banque PSA Finance’s long standing prudent and conservative
approach to credit financing is a key factor in its solidity during
the financial crisis,” PSA said.
In addition, the captive has €6bn (£5.1bn) of undrawn syndicated
credit facilities, and “sufficient” financial headroom for several
months of normal operations.
Banque PSA Finance successfully completed a €1bn (£857m)
securitisation transaction in July of this year.
VW FINANCIAL SERVICES
Financial Services division’s ‘positive’ Q3
performance
The Financial Services division of manufacturer Volkswagen has
reported it managed a “positive development despite the
increasingly tough environment and the resulting pressure on
margins” in Q3 2008.
In the nine months to September 30 2008, Volkswagen Financial
Services (VWFS) recorded sales revenue of €8.2bn (£6.8bn), up 11.3
per cent on the same period in 2007, with gross profit – at €1.8bn
(£1.5bn) – up 5.7 per cent. However, operating profits of €744m
(£621m) were virtually unchanged from the corresponding figure for
Jan-Sep 2007 of €747m (£624m). VWFS” again made a significant
contribution to the group’s strong results in the period from
January to September 2008,” Volkswagen said.
Operating profit for the quarter, meanwhile, of €228m (£190m)
was behind Q3 2007’s figure of €236m (£197m), and profit before tax
of €209m (£175m) was 29 per cent down on €293m (£245m) in Q3 last
year.
Total assets in the Financial Services division of €78.6bn
(£65.6bn) were 14.6 per cent higher as of September 30 2008 than at
the end of FY2007 – boosted by the integration of Scania’s
Financial Services operations into VWFS, as of July 22 2008.
Volkswagen reported that 1.9m new finance lease and insurance
contracts were signed in the first nine months of 2008 – up 1.6 per
cent on the year-ago figure. Customer financing and leasing
contracts grew in number by 4.5 per cent to 4.6m, while dealer
financing receivables grew by 5.1 per cent compared to the figure
at the end of 2007.
HONDA FINANCIAL SERVICES
Revenues up, income down in Q2 for Honda
captive
The Q2 2008 results for Honda Financial Services show that the
captive’s revenues jumped year-on-year – but that its operating
income tumbled.
Revenues for the three months ended September 30 2008 totalled
JPY304.3bn (£2.1bn), up 17.2 per cent compared with the same period
in 2007, but operating income fell to JPY53bn (£370m), down 16.4
per cent.
Honda ascribed the rise in revenues to “increased operating
lease revenues, despite negative currency translation effects”,
while “increased provision related to credit losses and allowance
for losses on lease residual values” were blamed for the drop in
income – more than offsetting increased revenues, Honda added.
The Financial Services division’s Q2 2008 net sales in Europe
were up 8.2 per cent compared with the same period a year ago, to
JPY3.7bn (£25.6m), Honda said.
FORD MOTOR CREDIT
Ford captive sees Q3 profits plummet
Ford Motor Credit’s pre-tax profits in the third quarter were
$161m (£108m) compared with $546m (£365m) in the year-ago period,
Ford reported – a fall of 71 per cent. Net income in Q3 2008 was
$95m (£64m), down from $239m (£160m) a year earlier.
“The decline primarily reflected the non-recurrence of net gains
related to market valuation adjustments from derivatives, a higher
provision for credit losses, and lower volume, partly offset by a
higher financing margin,” Ford said.
“We were able to earn a pre-tax operating profit in the third
quarter despite increased pressure from the market,” said Mike
Bannister, Ford Motor Credit chairman and CEO. “We expect the
marketplace to remain extraordinarily challenging. To weather these
conditions, we will continue to focus on our dealers and customers
through the factors we control — our strong credit practices,
solid risk management, and exceptional account servicing.”
The captive’s on-balance sheet net receivables as of September
30 2008 were $127bn (£85m), down from $141m (£94m) a year ago, hit
by a lower business volume in North America, restructuring costs,
and the impairment charge for North American operating leases in
Q2, among other factors, Ford said.
