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    Press Release Home Credit B.V.: IFRS consolidated results for the year ended 31 December 2012

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    Profit performance doubled with continuing excellent growth in consumer cash loans and retail deposits

    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, CIS and Asia, announces its consolidated financial results for the year ended 31 December 2012 in accordance with International Financial Reporting Standards (IFRS).
    “This has been a year of consolidation for Home Credit B.V. as we endeavour to combine the Home Credit-branded operations under one roof and continue our concerted push for growth across CEE, CIS and Asia. Our dual strategy of building our loan portfolio and expanding our branch network whilst continuously managing our costs and sharing best practice standards across the Group continues to deliver outstanding results. This strong organic growth enables us to fund the development of the growing business in Asia, furthering our ability to achieve our objective of long-term profitable growth. Looking ahead, we will continue to focus on leveraging our efficiency and expertise across established and new markets. Following the successful launch of our business in Indonesia in February this year, we plan to initiate operations in the Philippines in the end of 2013.”

    Jiří Šmejc,
    Chairman of the Board of Directors and Chief Executive Officer, Home Credit B.V.

    The success of 2012 is reflected in the key numbers as net profit more than doubled to EUR 506 million (compared to 2011 net profit of EUR 231 million), producing a 8.1% return on average assets.
    The Net Interest Margin remained solid at 18.9% in line with mid-term guidance. Total assets reached EUR 9.4 billion, achieving the regulatory benchmark required to allow HCBV to proceed with its consolidation strategy through the acquisition of the remaining Home Credit-branded businesses in China and Vietnam.  

    Operating income for 2012 reflected this growth across the business rising by 95.9% to EUR 1,773 million (2011: EUR 905 million).

    Net interest income for the year ended 31 December 2012 increased by 68.5% to EUR 1,057 million, compared to EUR 627 million for the prior year.

    Net fee and commission income continues to grow strongly (up 150.7% to EUR 597 in 2012 vs. EUR 238 million in 2011) thanks to a well-established cross-selling strategy which has led to the high penetration of insurance products, especially on cash loans.

    General administrative and other operating expenses rose by 62.3% to EUR 655 million from EUR 403 million due to the aggressive branch expansion in Russia and the building of new operations in Asia. HCBV continues to implement stringent cost management initiatives; the cost-to-income ratio declined to 36.9% from 44.6% in 2011.

    The Group’s steps to build the loan portfolio showed excellent results with EUR 8,088 million of new loans granted (2011: EUR 3,936 million),  the net loan portfolio rose 117.2% to EUR 6,531 million as at 31 December 2012 (2011: EUR 3,007 million). Growth was primarily boosted by the large increase in cash loans due to the accomplished expansion of the distribution network in Russia, the growing presence of the POS business in China and the acquisitions made in 2012. To facilitate this growth, HCBV has continued adding distribution points across the Group and now serves over 6.3 million active customers through 104,896 POS and loan offices, 952 bank branches, 3,097 post offices and 1,279 ATMs.

    HCBV’s strategy to increase retail deposits continued to be a success with the balance nearly tripling to EUR 4,724 million (31 December 2011: EUR 1,697 million). Share of current account balances and term deposits now comprise 59.6% of total liabilities (31 December 2011: 49.2%).

    Despite these high levels of growth, HCBV continued to maintain the quality of its loan portfolio with the NPL (non-performing loans more than 90 days overdue) share of the gross loan book again reduced to 7.6% (8.5% as at 31 December 2011). Although risk costs are growing along with the portfolio growth, they are in line with expectations and HCBV is continuously putting in place new measures to prevent fraud and increase effectiveness of debt collection in the emerging markets. Furthermore, the NPL coverage ratio was strengthened to over 118.9%, an extremely conservative position.

    HCBV remains strongly capitalised and deposits are now the key source of external funding: total equity amounted to EUR 1,505 million as at 31 December.

    Move to consolidate assets on a global scale: In 2012, HCBV acquired a 100% stake in HC Asia N.V. from PPF as part of an overall move to consolidate all Home Credit-branded companies under one holding entity. HCBV also executed agreements with PPF concerning the future acquisition of 100% of the shares in "Home Credit Consumer Finance Co., Ltd." [China], "CF Commercial Consulting (Beijing) Co. Ltd." [China] and "PPF Vietnam Finance Company LLC" [Vietnam]. The completion of the transactions is subject to obtaining regulatory approval from the respective regulators in China and Vietnam. As at 31 December 2012 the Group exercised control over Home Credit Bank JSC (Kazakhstan), and treated Home Credit Bank JSC as a consolidated subsidiary while the option was exercised and the Group became the 100% owner of the company in January 2013. Further information on these transactions is available in the 2012 IFRS report which can be found at



    Business Results As at Dec 31, 2012    As at Dec 31, 2011   Change,%
    Loans granted YTD  (EUR millions)    8,088 3,936 105.5 %
    Number of active clients (millions) 6.3 4.5 40.3 %
    Number of distribution points 108,945 72,365 50.5 %
    - Number of POS´s and loan offices 104,896 69,069 51.9 %
    - Number of bank branches 952 599 58.9 %
    - Number of post offices 3,097 2,697 14.8 %
    Number of employees (thousands) 38.8 21.8 78.4 %


    Income Statement (EUR millions) 12M period as at
    Dec 31, 2012         
    12M period as at
    Dec 31, 2011         
    Net interest income 1,057 627 68.5 %
    Operating income 1,773 905 95.9 %
    Credit risk costs1 (478) (167) 186.5 %
    Operating expenses2 (655) (403) 62.3 %
    Net profit for the year 506 231 118.6 %
    Net profit from continuing operations3    506 241 110.1 %

    1) Credit risk costs represent impairment losses
    2) Operating expenses comprise general administrative and other operating expenses
    3) Net profit for the period from continuing operations does not include discontinued operations in Ukraine


    Balance Sheet (EUR millions) As at Dec 31, 2012   As at Dec 31, 2011   Change,%
    Total assets 9,426 4,282 120.1 %
    Net loan portfolio 6,531 3,007 117.2 %
    Equity 1,505 831 81.0 %
    Wholesale Funding 2,871 1,610 78.4 %
    Customer deposits and current accounts   4,724 1,697 178.3 %

    Source: Home Credit B.V., consolidated


    Income Statement Ratios 12M period as at
    Dec 31, 2012            
    12M period as at
    Dec 31, 2011
    Net interest margin1 18.9 % 20.5 %
    Net interest income to operating income    59.6 % 69.3 %
    Cost to average net loans2 15.0 % 16.4 %
    Cost income ratio3 36.9 % 44.6 %
    Cost of risk ratio4 11.0 % 6.8 %
    ROAA5 8.1 % 6.9 %


    Balance Sheet Ratios As at Dec 31, 2012    As at Dec 31, 2011
    Net loans to total assets 69.3 % 70.2 %
    NPL ratio6 7.6 % 8.5 %
    NPL coverage ratio7 118.9 % 111.4 %
    Deposits to total liabilities 59.6 % 49.2 %
    Equity to assets 16.0 % 19.4 %
    Equity and deposits to net loans ratio    95.4 % 84.1 %

     Source: Home Credit B.V., consolidated

    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 from continuing operations 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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