OREANDA-NEWS.  March 17, 2014. 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 and Asia, announces its consolidated financial results for the year ended 31 December 2013 in accordance with International Financial Reporting Standards (IFRS).

“Last year we have benefited from our drive to achieve geographical diversification thanks to the positive contribution made by our business across Asia. In China we substantially increased our presence and recently provide loans in 14 provinces; in Kazakhstan we strengthened deposit gathering capabilities through opening new branches in regions, we successfully launched our business in Indonesia and the Philippines. Furthermore, we have continued to drive further cost efficiencies while also growing loans and deposits. 

The robust performance in Asia tempered a weaker result in Russia, where regulatory reform and economic pressures hampered profitable growth – although the Russian business still posted a healthy Return on Average Equity of 20.9%. Even with the impact from Russia the Group posted a net profit for the year of EUR 324 million.

Our 2013 results fully validate the Group expansion strategy to high growth markets in Asia. In the future, the Russian business will have a smaller impact on overall Group performance thanks to the increased contribution from the Asian operations. I expect this positive, stabilizing trend to continue in the years to come.”

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

Highlights

2013 saw a strong operational performance at Home Credit with the value of loans granted rising by 20.4% to EUR 9,741 million while the number of active clients grew to 7.7 million, up 17.4%. Distribution points grew by 27% to almost 140,000, with 135,459 POS and loan offices, 1,328 bank branches and 2,825 post offices.

The net loan portfolio rose, up 9.8% to EUR 7,171 million (2012: EUR 6,531 million). This increase was driven by our strategy to drive organic growth across the Group and continue building new businesses in Asia, entering Indonesia and the Philippines during 2013, although growth was held back by the tough economic backdrop in Russia.

Total assets were stable at EUR 9.313 billion. 

The Group posted a net profit in 2013 of EUR 324 million, down 35.9%, impacted by the tough economic and regulatory environment in Russia, but supported by a strong performance in China, and solid contribution from Kazakhstan, Slovakia, and Belarus.

Operating income in 2013 reflected the growth across its regions, specifically in Russia, China and Kazakhstan, rising by 43.3% to EUR 2,542 million (2012: EUR 1,773 million). Net interest income in 2013 increased by 66.7% to EUR 1,762 million compared to EUR 1,057 million for the prior year. The Net Interest Margin remained solid at 19.9%.

General administrative and other operating expenses rose by 41.3% to EUR 925 million from EUR 655 million due to the increase in number of employees linked mainly to the development of the distribution networks in Russia, Kazakhstan and China. HCBV continues to implement stringent cost management initiatives; the cost-to-income ratio improved slightly at 36.4% from 36.9% in 2012.

HCBV continued to add steadily to retail deposits with the balance rising by 8.1% to EUR 5,105 million (31 December 2012: EUR 4,724 million). Share of current account balances and term deposits now comprise 65.6% of total liabilities (31 December 2012: 59.6%).

The quality of HCBV’s loan portfolio dipped in 2013 with the NPL (non-performing loans more than 90 days overdue) share of the gross loan book up to 12.2% (7.6% as at 31 December 2012) due to the deteriorating position in Russia. However, the NPL coverage ratio remained strong at 117% (2012: 118.9%).

HCBV remains strongly capitalised and deposits are now the key source of external funding: total equity amounted to EUR 1,532 million as at 31 December 2013.